Govt keeping an eye on Indians sending money abroad:MP, Rajasthan, Gujarat UP get less than 10% of India’s India’s foreign inward remittances

The Income Tax Department has started a nationwide verification of suspicious foreign money transfers. According to Reserve Bank of India (RBI) data, Indian residents send nearly $29 billion or around ₹2.75 lakh crore, abroad every year through official channels, making strict tracking essential to prevent illegal money flows. The Reserve Bank of India had published the detailed findings of its 6th Round of India’s Remittances Survey in the RBI Bulletin. Total inward remittances to India doubled from $55.6 billion in FY 2010-11 to $118.7 billion in FY 2023-24. State-wise share in India’s foreign remittances: Data compiled from Authorised Dealer (AD) banks by the Reserve Bank of India shows the percentage distribution of inward remittances across states and Union Territories for FY 2023-24: Indian govt allows citizens to send a maximum of $250,000 abroad every year Nationwide scrutiny on suspicious foreign money transfers The Income Tax Department is verifying suspicious money sent outside India. This step aims to catch tax evasion and undisclosed foreign accounts. The verification focuses on individuals sending large sums of money abroad without proper tax declarations. All cross-border transfers are tracked through banks using the Reserve Bank of India’s reporting systems. Authorized banks must collect detailed declarations from every remitter before sending funds overseas. How much money Indians send abroad every year? Under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), resident Indians can remit funds abroad for specific permitted purposes. These include education, medical care, foreign travel, buying foreign stocks, and supporting family members. RBI rules allow a resident individual, including minors, to send up to $250,000 (roughly ₹2.37 crore) in a single financial year. In recent years, overall annual transfers under this scheme have averaged between $28 billion ₹2.66 lakh crore and $31 billion or ₹2.94 lakh crore. 5-year trend in foreign remittances: Rise and Fall Data published in the RBI Bulletin shows a clear pattern in outward remittances over the last five years. Outflows grew rapidly post-pandemic, hit a record high in FY 2023-24, and then saw a slight drop. Why Indians are sending lower money abroad than earlier? The Reserve Bank of India attributed the recent fall in remittances mainly to global economic slowdown, reduced overseas spending on studies, and stricter student visa rules in countries like the US, UK, and Canada. All foreign exchange transactions in India are governed by the Foreign Exchange Management Act (FEMA), 1999. The RBI uses FEMA to create clear rules for moving money in and out of the country. Govt and RBI actions against undeclared foreign money: To curb undisclosed overseas assets and black money, the Government and RBI have set up strict reporting structures. RBI’s rules on Swiss Bank deposits and overseas accounts Holding a bank account abroad, including in Swiss banks, is permitted only if declared under RBI regulations and tax laws. Under RBI’s LRS rules, resident individuals can open, maintain, and hold foreign currency accounts with foreign banks for permissible transactions. However, undisclosed deposits in foreign banks violate FEMA guidelines and trigger legal scrutiny. The money deposited by Indians in Swiss banks had tripled in 2024 to 3.5 billion Swiss francs, which was approximately ₹37,600 crore then. This was three times more than in 2023, when the amount was only 1.04 billion Swiss francs. Swiss National Bank (SNB) had released these figures back in 2025. This money belonged to Indian individuals and companies who had deposited in Swiss banks. Was this black money? No, Swiss authorities and the Indian government had clarified that not all money deposited in Swiss banks could be considered black money. These figures were from the official records of the Swiss National Bank (SNB). This did not include the money deposited by Indians, NRIs, or others in the name of ‘benami’ companies. Swiss officials had said they cooperated with India in the fight against tax evasion and fraud. Why do Indians deposit money in Swiss Bank? There are 4 major reasons: Is Swiss Bank account data shared? Specific details about individual account holders are exchanged confidentially between tax authorities under international agreements: Government Channel: Data on Swiss bank accounts held by Indians is shared directly with the Income Tax Department (Central Board of Direct Taxes) under the treaty for Automatic Exchange of Information (AEOI) with Switzerland. Strict Privacy Terms: Treaty rules require tax authorities to keep individual financial data strictly confidential. The details are used internally to check tax compliance, not released publicly by the RBI or the Ministry of Finance.