Is there a tax on money transferred from India to Australia?

Under India’s Liberalized Remittance Scheme (LRS), residents can remit up to USD 250,000 annually with a 20% TCS if the amount exceeds ₹7 lakh, which can later be claimed as tax credit. Money received in Australia isn’t taxed if it’s personal savings, though income generated from it may be subject to Australian taxes.

What documentation is required for transferring large amounts?

For significant transfers under LRS, banks often require KYC documents and source proof (e.g., bank statements or investment proof) to ensure compliance with Indian regulations. Additionally, a PAN card and Form A2 are necessary to declare the purpose of the transfer.

Are there limits on the amount I can transfer to Australia?

Yes, under LRS, you can transfer up to $250,000 per financial year from India for various personal purposes, including family support or education. There are no restrictions on receiving funds in Australia, but transfers over AUD 10,000 are reported to AUSTRAC for compliance.

How does tax residency impact my transfer?

Tax residency plays a crucial role. If you’re a tax resident of Australia, any income generated from transferred funds, such as interest or capital gains, may be subject to Australian taxes. However, if you’re a non-resident, only Australian-sourced income may be taxed, not the transferred principal.

Can double taxation apply to my funds?

India and Australia have a Double Taxation Avoidance Agreement (DTAA), preventing the same income from being taxed twice. However, if the funds come from taxable Indian income, like rental or business profits, it’s essential to check if you qualify for tax credits under the DTAA.

What is the best way to minimize fees when transferring?

Online remittance platforms or specialized money transfer companies typically offer better exchange rates and lower fees than banks, which may also add a markup on currency conversion. Using platforms with transparent, mid-market rates ensures cost savings on international transfers.

How much money can I send to Australia from India without paying tax?

You can remit up to USD 250,000 per year tax-free under LRS. TCS applies only above ₹10 lakh, and not for education loans.

Do I have to pay tax in Australia for money received from India?

Not if it’s a personal transfer. Only business or income-generating funds need to be declared.

Yes. TCS can be claimed back when filing your income tax return, provided your total tax liability is lower.

Can I send money to buy a property in Australia?

Yes. Under purpose code S0006, investment in property is permitted up to USD 250,000 annually.

Is HOP Remit better than traditional banks?

Yes, for faster transfers, lower fees, and transparent pricing. It’s optimized for cross-border remittances.

Category – Finance

Send Money from India to Australia Tax-Free in 2025: The Ultimate Guide

Updated On:

Apr 10, 2025

Karthik

Introduction: Why This Guide Matters

If you’re planning to support a loved one, fund education, or invest in Australia, understanding how to send money from India to Australia tax-free is more important than ever.

With the Indian diaspora in Australia surpassing 700,000 and growing every year, thousands of families and students need a cost-effective, tax-efficient way to transfer money. The challenge? Navigating India’s tax rules and Australia’s regulations while making sure your transfer is fast, compliant, and gets maximum value.

This guide gives you exactly that – clear, updated strategies to send money from India to Australia tax-free, without hidden fees or complicated paperwork.

What Does “Tax-Free” Actually Mean?

In India, tax on international transfers is managed through the Liberalized Remittance Scheme (LRS). Under this scheme, resident individuals can remit up to USD 250,000 per financial year for permissible purposes – such as education, medical treatment, travel, family support, or investment – without paying income tax.

However, there’s a catch: Tax Collected at Source (TCS) might still apply unless you’re careful.

Let’s break it down.

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Understanding TCS: What Changed in 2025?

Effective April 1, 2025, here’s how the TCS rules apply to foreign transfers:

Purpose	TCS Rate	Threshold
Education via Loan from a Financial Institution	0%	Up to ₹10 lakh
Education (Self-funded) or Medical Expenses	5%	On amount exceeding ₹10 lakh
Other Transfers (Investment, gifts, etc.)	20%	On amount exceeding ₹10 lakh

Tip: TCS is not a final tax. It can be claimed back when you file your income tax return.

How to Send Money from India to Australia Tax-Free?

Here’s how you can ensure your transfer stays tax-free and stress-free:

1. Keep Your Remittance Within the ₹10 Lakh Annual Limit

Avoid triggering TCS by staying under the threshold. Spread larger amounts across financial years if needed.

2. Use an Education Loan Route

If you’re sending money for education, remitting through a financial institution-backed loan brings the TCS to 0%.

3. Distribute Transfers Among Family Members

Each individual has a separate USD 250,000 annual limit. Family members can share the load to avoid crossing thresholds.

4. Maintain Proper Documentation

University invoices, medical bills, or investment proofs help clarify the purpose if ever questioned by banks or authorities.

5. Understand the Purpose Codes

Every transfer under LRS needs a purpose code. Use the correct one for smooth processing:

Code	Purpose
S0305	Education
S0304	Medical Treatment
S1301	Maintenance of Relatives
S1302	Gifts
S0006	Investment Abroad

Does Australia Tax the Money You Receive?

Generally, Australia does not tax personal remittances. However, if the funds are used for business, investment, or generating income, they may be reportable under Australian tax rules.

To avoid confusion, always clarify the source and purpose of the money. If you’re receiving a gift, it’s typically exempt up to AUD 18,000 annually.

Best Way to Send Money from India to Australia Tax-Free

Here’s a quick look at your options:

Method	Speed	Cost	Transparency	Best For
Bank Transfers	2-5 days	High	Low	Traditional users
Online Services (Wise, Xoom)	1-3 days	Moderate	Medium	Tech-savvy users
HOP Remit by moneyHOP	12-24 hrs	Low	Full disclosure	Students, families and Tech-savvy users

HOP Remit is built for people who want to send money from India to Australia tax-free while maximizing value, minimizing effort, and staying compliant.

Compare best ways to send money abroad from India

Visual Guide: Smart Remittance Planner for Students

Wondering how to split your remittances across semesters and avoid TCS? Here’s a practical planner that Indian students can follow for each academic term.

Want to try this plan? Start your first tax-free transfer now with HOP Remit by moneyHOP.

Common Mistakes to Avoid

Crossing TCS limits unknowingly: Always calculate year-to-date remittances before a new transfer.

Choosing the wrong provider: Many services hide fees in exchange rates. Always compare total receivable amounts.

Missing out on claiming TCS refunds: File your returns and reclaim eligible TCS if deducted.

Why Choose HOP Remit by moneyHOP?

If your goal is to send money from India to Australia tax-free, here’s why HOP Remit stands out:

No hidden charges: You see exactly what you’re paying for.

Best exchange rates: Live rate calculator gives you market-beating rates.

24/7 transaction initiation: Initiate and track transfers anytime.

Full compliance: RBI-regulated, fully digital, and transparent.

Check our live exchange rates here

Real-Life Scenario

Let’s say you’re sending ₹9.5 lakh to your child studying in Sydney. If done through a traditional bank, you may face high service fees and longer delays.

With HOP Remit, you stay under the TCS threshold, avoid unnecessary deductions, and your child receives the money the same day – with better rates.

That’s how you send money from India to Australia tax-free and efficiently.

Why pay more for international money transfers when moneyHOP is here?

NO hidden fees
ZERO convenience fees
Real-time updates
Lowest exchange rates

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Final Thoughts: Plan Smart, Transfer Confidently

You don’t have to pay more or worry about tax traps when sending money abroad. With the right planning and platform, you can send money from India to Australia tax-free, quickly, and confidently.

Choose a smarter way to remit. Choose clarity, compliance, and cost savings.

Try HOP Remit by moneyHOP today and simplify your next transfer from India to Australia.