Wise, Western Union or Remitly: What RBI's Inward Remittance Rules Mean for Money from the US
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Short answer
Wise, Western Union and Remitly are compared here for receiving US dollars in India in 2026. Client payments follow RBI's FEMA Regulations 2026: an EDF, nine-month realisation, a purpose code and a FIRC or FIRA. Exports are zero-rated for GST, with no IGST charged under an LUT. Family transfers under MTSS are capped at USD 2,500 each.
| Applies to | Rules involved | Platforms compared | Last verified |
|---|---|---|---|
| Indian freelancers, agencies and companies paid in USD by clients in the United States, and individuals in India receiving personal remittances from family in the US. | FEMA (Export and Import of Goods and Services) Regulations, 2026, FEMA Manner of Receipt and Payment Regulations, 2023, RBI Master Direction on MTSS, FETERS purpose codes, IGST Act s.2(6) and s.16, CGST Rule 96A, and on the US side the CFPB remittance transfer rights, the FinCEN funds travel rule and the IRS remittance transfer excise tax | Skydo, Razorpay, Wise Business, Remitly, Western Union | 6 Oct 2026 |
How do Wise, Western Union and Remitly compare for receiving money from the US in India?
Platforms named in the question are shown alongside the 2 highest payouts among the platforms this site covers, ranked by the INR received on a $5,000 invoice. Fees were checked on 30 Sept 2026.
| Platform | Best for | Fee | FX markup | Settlement | FIRA | RBI PA-CB status | INR on $5,000 | Source |
|---|---|---|---|---|---|---|---|---|
| Skydo | Indian freelancers and exporters receiving mid to large B2B invoices | $19 up to $2,000, $29 to $10,000, 0.3% above + GST | States zero FX margin at live rate | States under 24 hours; FAQ timelines vary by rail | States instant, free FIRA per payment | RBI authorised PA-CB Inward and Outward; on RBI list | ₹4,70,314 | Skydo pricing (checked 6 Oct 2026) |
| Razorpay | Indian businesses and freelancers on Razorpay invoicing foreign clients | 1% per bank transfer (Rs 1,000 flat below Rs 1,00,000) + GST | States 0% markup on MoneySaver at live rate | States 1 day (T+1 after invoice shared) | FIRS within 24 hours of settlement; no charge listed | RBI authorised PA-CB inward and outward, plus PA-O | ₹4,67,968 | Razorpay pricing (checked 6 Oct 2026) |
| Wise Business | Freelancers and small exporters wanting multi-currency local accounts and eFIRC | Calculator: 1.6% + $2 per payment + 18% GST | Mid-market rate; cost is the 1.6% conversion fee | States under 90 minutes in business hours | eFIRC per transfer, 2 USD + 18% GST | States in-principle PA-CB approval; not found on RBI page | ₹4,64,563 | Wise Business pricing (checked 6 Oct 2026) |
| Remitly | Family and personal remittances from the US to India | Sender pays $3.99 below $1,000, $0 from $1,000; recipient charges not confirmed | Not published; may earn from rate difference | Promised time per transfer; specific timings not confirmed | Not confirmed; not stated on Remitly pages | Not confirmed; not shown as PA-CB authorised | Not for business: Remitly is for personal, family or household transfers | Remitly pricing (checked 6 Oct 2026) |
| Western Union | Personal and family remittances sent to India from abroad | Receiver free; sender fees vary; MTSS bars trade remittances | Margin not published; states it earns from currency exchange | Not confirmed; no bank deposit timeline given | Not confirmed; not a route for export proceeds | Paid under RBI MTSS via authorised Indian Agents | Not for business: RBI MTSS bars trade related remittances | Western Union pricing (checked 6 Oct 2026) |
Which RBI rule governs money received in India from the United States in US dollars?
The RBI rule depends on what the USD payment is for. A US client paying an Indian freelancer or company for services is an export receipt under the FEMA (Export and Import of Goods and Services) Regulations, 2026, in force from 1 October 2026. A relative in the US sending money home is a personal remittance, and when it runs through a money transfer company's Indian agent the RBI Master Direction on MTSS applies, which excludes trade related remittances. For example, a designer invoicing a New York client USD 3,000 follows the export rules, while USD 500 sent by a parent for family expenses is a personal transfer. See how to receive USD payments in India.
| Rule | Source | Clause | Plain meaning | Best for |
|---|---|---|---|---|
| Currency and channel | FEMA Manner of Receipt and Payment Regulations, 2023 | Reg 3(2)(I)(a)(iii) and 3(2)(II)(ii) | The US is not an ACU member, so trade and non-trade receipts can be in INR or any foreign currency, including USD, routed through an authorised bank or authorised person. | Anyone checking that a USD receipt is permitted |
| Export Declaration Form | FEMA Regulations, 2026 | Reg 3(2) | An exporter of services files an EDF for the full export value within 30 days from the end of the month in which the invoice was raised. Services other than software may file on or before the date payment is received. | Freelancers and agencies invoicing US clients |
| Realisation period | FEMA Regulations, 2026 | Reg 5(1) | The full export value is realised within nine months from the invoice date, or twelve months if invoiced or settled in INR. The AD bank may extend the period. | US clients on long payment terms |
| EDPMS closure and reduction | FEMA Regulations, 2026 | Reg 4(2), first proviso; Reg 6, proviso | For invoices up to Rs 10 lakh, the EDPMS entry may be closed on the exporter's declaration that payment was realised in full or otherwise, and a reduction or non-realisation of export value may be permitted on the exporter's declaration. | Freelancers with smaller USD invoices |
| Purpose code reporting | FEMA Regulations, 2026; FETERS purpose codes | Reg 18(2); receipt purpose code list | The AD bank reports each foreign trade transaction in FETERS with a purpose code that matches the service sold. Family maintenance has its own code, P1301, in the transfers group. | Choosing the right code with your bank |
| Personal remittances via MTSS | RBI Master Direction on MTSS | Paras 1.1 and 3.4 | Only inward personal remittances, such as family maintenance, are allowed. Each remittance is capped at USD 2,500 and one beneficiary can receive 30 per calendar year. Trade related remittances are not allowed. | Families receiving money from relatives in the US |
| US sender rights | CFPB remittance transfer rights | Disclosures, cancellation and error resolution | A US consumer sending an electronic transfer of more than USD 15 abroad gets information on fees, taxes and the exchange rate before and after paying, can usually cancel within 30 minutes at no charge, and has 180 days to report an error. | US family members sending money to India |
| US remittance tax | IRS Form 720 instructions | IRS No. 155, section 4475 | A 1% US excise tax applies to certain remittance transfers made after 2025 when the sender pays with cash, a money order, a cashier's check or a similar physical instrument. The provider collects it from the sender. | US senders who fund transfers in cash |
| US travel rule | FinCEN funds travel rule Q&A | Question 1 | Transmittals of funds of USD 3,000 or more carry sender and recipient details through the payment chain. Transfers governed by the Electronic Fund Transfer Act are outside this rule. | Senders in the US moving larger amounts |
Which option leaves the most rupees when USD 500, USD 2,000 or USD 5,000 is sent from the US to India?
Each row applies the platform's published fee, FX markup and 18% GST on the fee to the XE mid-market rate for 3 Nov 2026. Platforms without full published pricing are not included.
| Platform and invoice | Fee | FX markup | GST | INR received | Cost | Best for |
|---|---|---|---|---|---|---|
| Skydo, $500 | ₹1,800 | ₹0 | ₹324 | ₹45,232 | 4.48% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $2,000 | ₹1,800 | ₹0 | ₹324 | ₹1,87,299 | 1.12% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $5,000 | ₹2,747 | ₹0 | ₹494 | ₹4,70,314 | 0.68% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Razorpay, $500 | ₹1,000 | ₹0 | ₹180 | ₹46,176 | 2.49% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $2,000 | ₹1,894 | ₹0 | ₹341 | ₹1,87,187 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $5,000 | ₹4,736 | ₹0 | ₹852 | ₹4,67,968 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Wise Business, $500 | ₹929 | ₹0 | ₹167 | ₹46,259 | 2.32% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $2,000 | ₹3,160 | ₹0 | ₹569 | ₹1,85,694 | 1.97% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $5,000 | ₹7,620 | ₹0 | ₹1,372 | ₹4,64,563 | 1.90% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
For example, on a $2,000 invoice Skydo pays about ₹1,87,299 and Wise Business about ₹1,85,694 at today's reference rate, a difference of ₹1,605.
What documents and GST apply to payments received in India from the United States?
A services export paid from the US needs an LUT before invoicing, an EDF after invoicing, and a FIRC or FIRA after the USD is converted and credited. GST on the export is zero-rated under IGST section 16 when the conditions in section 2(6) are met, including payment in convertible foreign exchange. A personal remittance from family is not an export, so no EDF, LUT or invoice applies to it. Read FIRC vs FIRA vs e-BRC for the differences.
| Document | Who issues it | When needed | Best for |
|---|---|---|---|
| LUT in FORM GST RFD-11 | The exporter files it with the jurisdictional Commissioner under CGST Rule 96A | Before export, so USD invoices go out without IGST | GST-registered exporters billing US clients |
| EDF (Export Declaration Form) | The exporter files it with the AD bank or other specified authority | Within 30 days from the end of the invoice month | All service exports from 1 October 2026 |
| FIRC or FIRA | The AD bank that credits the rupees | After the payment is credited; keep one per receipt as proof of export | Freelancers and agencies paid by US clients |
| Purpose code | The AD bank reports it under FETERS | With each inward remittance; confirm the code with your bank | Classifying the USD receipt correctly |
| KYC compliant resident account | The recipient bank, under the MTSS Master Direction | Before a direct-to-account MTSS credit, which must not go to KYC non-compliant, NRE or NRO accounts | Families receiving personal remittances |
What changed in the rules for receiving money from the US in India this year?
Two sets of rules changed in 2026. On the Indian side, the FEMA (Export and Import of Goods and Services) Regulations, 2026 came into force on 1 October 2026, and A.P. (DIR Series) Circular No. 20 superseded the Master Direction on Export of Goods and Services from the same date. On the US side, a 1% remittance transfer excise tax applies to certain cash-funded transfers made after 2025.
- New regulations: The 2026 Regulations replaced the 2015 export regulations from 1 October 2026.
- Realisation: An amendment dated 22 September 2026 set nine months, or twelve months for rupee invoicing, in place of the fifteen and eighteen months first notified (Regulation 5).
- Monthly EDF: Service exporters file the EDF within 30 days of the end of the invoice month under Regulation 3(2). See the EDF guide.
- US excise tax: Remittance transfer providers collect a 1% tax under section 4475 when a US sender pays in cash, by money order or by cashier's check (IRS Form 720 instructions).
- MTSS update: The MTSS Master Direction was updated as on 29 September 2026, and its USD 2,500 and 30-per-year limits remain.
How did we verify this?
Every rule is linked to its official source below with the date it was checked. Platform figures come from each platform's own pages; the full method is on the methodology page.
- RBI: FEMA (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, as amended by FEMA 23(R)/(1)/2026-RB, Regulations 1(2), 3(2), 4(2), 5(1), 6, 18(2); amendment footnotes 2 to 4 (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services, Supersession of Master Directions from 1 October 2026 (checked 6 Oct 2026)
- RBI: FEMA (Manner of Receipt and Payment) Regulations, 2023, Regulation 3(2)(I)(a)(iii) and 3(2)(II)(ii) (checked 6 Oct 2026)
- RBI Master Direction: Money Transfer Service Scheme (MTSS), updated as on 29 September 2026, Paras 1.1 and 3.4(a) to (c); direct-to-account alert (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 (2012), FETERS purpose codes for receipts, P0802, P1006, P1301 and P1302 (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated 29 February 2012: Reporting under FETERS, Paras 1 and 2 (checked 6 Oct 2026)
- IGST Act, 2017: Section 2, Definitions, Clause (6), export of services (checked 6 Oct 2026)
- IGST Act, 2017: Section 16, Zero rated supply, Sub-sections (1) and (3) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 96A, Export under bond or Letter of Undertaking, Sub-rule (1) (checked 6 Oct 2026)
- CFPB: What is a remittance transfer and what are my rights?, Disclosures of fees, taxes and exchange rate; 30-minute cancellation; 180-day error notice (page last reviewed 3 Oct 2024) (checked 6 Oct 2026)
- FinCEN: Funds Travel Regulations, Questions and Answers, Question 1, USD 3,000 threshold (checked 6 Oct 2026)
- IRS: Instructions for Form 720, Excise tax on remittance transfers (IRS No. 155), section 4475 (checked 6 Oct 2026)
- Skydo homepage (pricing and fee calculator), Know what you pay; calculator showing GST 18% of transaction fee (checked 6 Oct 2026)
- Razorpay MoneySaver Export Account (International Bank Transfers) pricing, Standard Plan: 0% FX markup, 1% fee, FlashLinks 2%, GST applicable, flat fee of INR 1,000 on transactions below INR 1,00,000, setup and AMC INR 0 (checked 6 Oct 2026)
- Wise India: Fees for receiving money (Business), Conversion fee depends on the currency; eFIRC for every transfer; GST 18% of (conversion fee + eFIRC fee); calculator (checked 6 Oct 2026)
- Remitly: Send Money to India from the US (checked 6 Oct 2026)
- Western Union India: Receive money (checked 6 Oct 2026)
Frequently asked questions
Can a US client pay an Indian freelancer's invoice through an MTSS money transfer to a bank account in India?
No. The RBI Master Direction on MTSS allows only personal remittances such as family maintenance, and it excludes trade related remittances. A client payment for services is an export receipt under the FEMA Regulations 2026, so it must reach your account through a channel your AD bank can report as an export.
Is there an RBI limit on family money received in India from the USA under MTSS?
Yes. Under the MTSS Master Direction, each inward personal remittance is capped at USD 2,500. One beneficiary can receive 30 remittances in a calendar year. Amounts up to Rs 50,000 may be paid to the beneficiary in cash. Direct-to-account credits must not go to KYC non-compliant, NRE or NRO accounts.
Which RBI purpose code applies to USD received in India from family in the USA?
The RBI receipt purpose code list has P1301 for inward remittance from Indian non-residents towards family maintenance and savings, and P1302 for personal gifts and donations. Client fees use a services code instead. See P1301 purpose code and confirm the final code with your bank before the money is credited.
Which purpose code applies when a US client pays an Indian software freelancer in USD?
The RBI purpose code list includes P0802, described as software consultancy/implementation (other than those covered in SOFTEX form). Other services have their own codes, such as P1006 for business and management consultancy and public relations services. Read purpose code for freelancers and confirm the code with your AD bank.
Does GST apply when an Indian freelancer receives USD from a US client in 2026?
The service is an export under IGST section 2(6) when the supplier is in India, the client and place of supply are outside India, payment arrives in convertible foreign exchange such as USD, and both are not establishments of one person. Exports are zero-rated under section 16. With an LUT, no IGST is charged. See LUT filing.
How long does an Indian exporter have to receive USD from a US client under the FEMA 2026 inward remittance rules?
Regulation 5 of the FEMA Regulations 2026 gives nine months from the invoice date for services, or twelve months when the invoice is raised or settled in Indian rupees. The AD bank may extend the period. Read the export realisation period guide and extension of the realisation period.
Does the 1% US remittance tax apply to money sent from the USA to an Indian bank account?
Only for certain transfers. The IRS Form 720 instructions say the section 4475 tax of 1% applies to remittance transfers after 2025 when the sender pays with cash, a money order, a cashier's check or a similar physical instrument. The remittance transfer provider collects it from the sender in the US, not from the recipient in India.
What proof of a USD inward remittance does an Indian exporter keep under the 2026 RBI rules?
Keep the export invoice, the EDF filed under Regulation 3(2), and the FIRC or FIRA your bank issues once the USD is credited in rupees. These records support the zero-rated GST claim and EDPMS closure. Read what a FIRA is and receiving money from the United States.