How to Send Money from India to Canada: A Complete Guide

How much money can you send from India to Canada? How do you actually send it? And will you get taxed on it? Every year, thousands of Indian households wire money to Canada for tuition, rent, or business payments, most commonly through a bank transfer under the RBI's Liberalised Remittance Scheme, which caps you at USD 250,000 a year. What most people get wrong isn't the limit; it's the tax: get the purpose classification wrong and you could hand over 20% instead of 2%. LuLu Forex processes these transfers daily under full RBI compliance, and if you're new to moving money abroad, our guide to managing forex transactions covers the basics. Here's what applies specifically to a Canada transfer right now.

What Documents Do You Actually Need?

Every LRS remittance needs three things regardless of purpose:

1. PAN card (mandatory, no exceptions)
2. Form A2 declaration, filled out with your authorised dealer
3. Proof matching the stated purpose of the transfer

If You're Sending Money for Education

1. Admission or offer letter from the Canadian institution
2. Fee invoice showing the exact amount due
3. Loan sanction letter, if the education is loan-funded, since this changes your tax outcome completely

If You're Sending Money for Family Maintenance or Business

1. Relationship proof (for family transfers) or invoice/contract (for business payments)
2. Bank statements may be requested for larger amounts

How Much Tax Will You Actually Pay?

The rates took effect on April 1, 2026, and many resources on the web continue to refer to the previous rates.

1. If your combined LRS remittances stay under ₹10 lakh in a financial year, no TCS will be applicable.
2. Self-funded education or medical treatment over ₹10 lakh: 2% TCS on the amount exceeding ₹10 lakh.
3. Education funded by a loan from an eligible institution under Section 80E: 0% TCS, no matter how much you send.
4. Anything else above ₹10 lakh- family maintenance, gifts, investments, business payments: 20% TCS.

In the Budget 2026 speech, FM Nirmala Sitharaman announced the reduction from 5% to 2% for education and medical remittances. The one thing people miss is that TCS isn't an additional fee deducted from you. It's deducted from your total income tax when you file your tax return, and you'll get it back if you overpaid your taxes.

What's Different About Sending Money to a Canadian Bank Account?

Canada does not accept IBAN, though many first-time remitters assume it does. What you need from your recipient:

1. A 3-digit institution number (identifies the recipient's bank to the payment network)
2. A 5-digit transit number (identifies the branch)
3. A bank account number
4. The SWIFT/BIC code.

Most recipients in Canada bank with RBC, TD, Scotiabank, BMO, or CIBC, and getting even one of these numbers wrong is the most common reason a transfer gets delayed or bounced back.

How Long Does It Take and What Does It Actually Cost?

A wire transfer through an AD-II licensed dealer usually takes 1 to 3 business days, depending on the number of correspondent banks the payment passes through.

There's one thing to plan around: don't wire tuition on the payment deadline itself, since weekend or holiday delays on the Canadian side could push settlement past it. The real cost isn't a flat fee; it's the exchange rate margin plus a service charge. Any increase in margin on a big education remittance is going to be more costly than any visible fee.

Bank, Forex Company, or App: Which Actually Works Here?

Banks are trusted but usually carry wider exchange margins and slower processing. Apps are cheap for small, routine transfers but tend to struggle once you're above LRS documentation thresholds or sending for a specific regulatory purpose like education. A dedicated AD-II licensed forex company sits in between: compliance handling, correct purpose classification (which decides your TCS rate), and support when a document is missing, or a bank rejects a transit number.

LuLu Forex handles the classification, the documentation, and the transfer end-to-end, so you're not the one figuring out whether your remittance qualifies for 2% or 20%.

FAQs

What is the LRS limit for sending money from India to Canada?

USD 250,000 per financial year, per individual, across all purposes combined.

Do I have to pay tax on money sent to Canada?

Only above ₹10 lakh in combined LRS remittances for the year, and the rate depends on why you're sending it.

Can I send more than USD 250,000 to Canada in one year?

Not without specific RBI approval. It isn't available on request.

What bank details does my Canadian recipient need to give me?

Institution number, transit number, account number, and SWIFT/BIC code. No IBAN.

How long does a transfer from India to Canada take?

Usually one to three business days by wire, longer around Canadian public holidays.

Is TCS an extra cost on top of my transfer?

No. It's collected upfront but adjusted against your income tax liability, and refunded if you've overpaid.

Can I avoid TCS entirely on an education remittance?

Yes, if it's funded by a loan from an eligible institution under Section 80E. No TCS applies regardless of the amount.