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

Thinking of how to send money from India to Canada tax-free?

You’re not alone. With all the new tax rules, RBI guidelines, and changes in TCS (Tax Collected at Source), it can get a bit confusing to figure out the best way to transfer funds abroad. The good news? It’s totally doable—as long as you know what to watch out for.

Thanks to the Liberalized Remittance Scheme (LRS), sending money internationally has become much more streamlined. And with recent updates to TCS thresholds, the process is more transparent than ever before.

In this guide, we’ll break it all down—step by step—so you know exactly how to send money from India to Canada tax-free while staying fully compliant and getting the most value out of your transfer.

Understanding the Liberalized Remittance Scheme (LRS)

The Liberalized Remittance Scheme, introduced by the Reserve Bank of India (RBI), permits resident Indians to remit up to USD 250,000 annually for approved purposes:

• Foreign education

• Medical treatment abroad

• Maintenance of close relatives

• Travel expenses

• Gifts and donations

• Investment in shares or property overseas

All remittances must be made through authorized dealers and financial institutions under FEMA regulations.

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Updated TCS Thresholds for 2025

Want to learn more about smart ways to legally avoid high remittance taxes? Check out our guide to avoiding 20% TCS on foreign remittances.

Effective April 1, 2025, the revised Tax Collected at Source (TCS) rates under LRS are:

To send money from India to Canada tax-free, ensure your total transfers for education or medical reasons remain under ₹10 lakh in a financial year.

Best Ways to Send Money from India to Canada Tax-Free

1. Choose the Right Purpose Code

Using the correct RBI purpose code ensures your transfer is compliant:

• S0305 – Education

• S0304 – Medical Treatment

• S1301 – Maintenance of close relatives

• S1302 – Gift

2. Use NRE Accounts (For NRIs)

Transfers from NRE accounts are not subject to TCS and fall outside the LRS framework. This method allows NRIs to send money from India to Canada tax-free.

3. Plan Transfers Across Financial Years

Split large transactions into two parts—one in March and one in April of the next financial year—to avoid exceeding the ₹10 lakh threshold and triggering TCS.

4. Select a Transparent Platform

Compare your options with our Top Fintech Platform for Sending Money Abroad in 2025.

Avoid high markups and hidden charges by using platforms like HOP Remit by moneyHOP. They ensure compliance with RBI norms, offer better exchange rates than banks, and reduce unnecessary fees.

Comparing Money Transfer Methods

Hidden Charges to Avoid

• Marked-up exchange rates

• SWIFT/intermediary bank fees

• Credit card interest charges

• Platform service fees without disclosure

Documentation Checklist

To send money from India to Canada tax-free and without delays, have these ready:

• PAN Card

• A2 Purpose Declaration Form

• University admission letter or medical certificate

• Loan sanction letter (if applicable)

How to Send Money from India to Canada Tax-Free: Step-by-Step

• Decide Purpose: Education, medical, family maintenance, or gifting.

• Check Thresholds: Stay within ₹10 lakh annually for applicable TCS exemption.

• Choose the Right Platform: Use moneyHOP for transparent, low-cost transfers.

• Fill Documentation: Complete KYC, PAN, and purpose declaration.

• Initiate Transfer: Track in real-time and retain receipts.

The 5 Golden Rules to Send Money from India to Canada Tax-Free

Real-Life Scenario

If you’re looking to send living expenses abroad, you may also like our guide on sending living expenses to Canada from India.

Rohit is sending ₹9.8 lakh to his daughter studying in Canada. He uses the education purpose code (S0305) and chooses HOP Remit. No TCS is applied as the amount is under ₹10 lakh, and his platform provides better rates than his bank.

Tax Refunds and Reimbursements

If TCS is deducted:

• Include it in your ITR filing

• Attach necessary remittance and purpose documents

• Claim refund through the IT portal

Common Mistakes to Avoid

• Exceeding the annual limit without planning

• Using incorrect or vague purpose codes

• Ignoring currency conversion losses

• Relying on agents with unclear pricing

Why Choose HOP Remit by moneyHOP?

HOP Remit is moneyHOP’s full-stack remittance solution tailored for Indian residents and students who need to send money abroad. It’s built to make international transfers seamless, cost-effective, and completely transparent.

Key Features of HOP Remit:

• Transparent Rate Calculator: See every rupee’s worth in real-time before you send.

• Lowest Transfer Fees in the Market: No hidden charges or inflated forex markups.

• Student-Friendly Features: Upload university fee invoices and payment receipts in one place.

• Compliant and Secure: Follows all RBI norms with robust documentation processes.

• 24/7 Support: Get round-the-clock human assistance whenever you need help.

Whether you’re paying tuition or sending money to family, HOP Remit ensures your transfer is tax-efficient, reliable, and fast. Download the app today to experience smarter remittances.

Final Thoughts

Sending money from India to Canada tax-free is entirely possible with strategic planning. By staying under the revised ₹10 lakh threshold, choosing transparent platforms like HOP Remit by moneyHOP, using the correct purpose codes, and maintaining documentation, you can make your transfers seamless and tax-efficient.

Ready to send money from India to Canada tax-free? Use HOP Remit and make every rupee work for you.