Remit money to India from balance transfer of credit card
Is this transaction legal Yes it is. Are there any tax implications in US?  The interest is taxable in US. From what I understand, there are no tax implications in India. Yes this is right. The question you haven't asked is does this makes sense? So you are paying 3% upfront. Getting 8% at end of one year. You can making monthly repayments through the year. You have not factored in the Fx Rate and their fluctuations. For Example you would convert USD to INR and back to USD. Even if you do this the same day, you loose around 2% that is referred to as Fx Spread. Plus the rates for USD and INR get adjusted for inflation. This means that INR will loose value in a year. In long term it would be balance out [i.e. the gain in interest rate is offset by loss in Fx rate]. At times its ahead or behind due to local conditions. "As Dheer has already told you in his answer, your plan is perfectly legal, and there are no US tax issues other than making sure that you report all the interest that you earn in all your NRE accounts (not just this one) as well as all your NRO accounts, stock and mutual fund dividends and capital gains, rental income, etc to the IRS and pay appropriate taxes. (You do get a credit from the IRS for taxes paid to India on NRO account income etc)  You also may also need to report the existence of accounts if the balance exceeds $10K at any time etc. But, in addition to the foreign exchange conversion risk that Dheer has pointed out to you, have you given any thought to what is going to happen with that credit card? That 0% interest balance of $5K does not mean an interest-free loan 0f $5K for a year (with $150 service charge on that transaction). Instead, consider the following. If you use the card for any purchases, then after the first month, your purchases will be charged interest from the day that you make them till the day they are paid off: there is no 25-day grace period. The only way to avoid this is to pay off the full balance ($5K 0% interest loan PLUS $150 service charge as well as any other service charges, annual fees etc PLUS all purchases PLUS any interest) shown on the first monthly statement that you receive after taking that loan. If you choose this option, then, in effect, have taken a $5K loan for only about 55 days and have paid 3%  interest (sorry, I meant to write) service fee for the privilege. If you don't use the card for any purchases at all, then the first monthly statement will show a statement balance of $5130 and (most likely) a minimum required payment of $200. By law, the minimum required payment is all interest charged for that month($0) PLUS all service fees charged during that month ($150) PLUS 1% of the rest ($50). Well, actually the law says something like ""a sufficient fraction of the balance to ensure that a person making the required minimum payment each month can pay off the debt in a reasonable time"" and most credit card companies choose 1% as the sufficient fraction and 108 months as a reasonable time.  OK, so you pay the $200 and feel that you have paid off the service fee and $50 of that 0% interest loan. Not so!  If you make the required minimum payment, the law allows that amount to be be applied to any part of the balance owing. It is only the excess over the minimum payment that the law says must be applied to the balance being charged the highest rate. So, you have paid off $200 of that $5K loan and still owe the service fee. The following month's statement will include interest on that unpaid $150. In short, to leave only the 0% balance owing, you have to pay $350 that first month so that next month's statement balance will be $4800 at 0%. The next month's required minimum payment will be $48, and so on. In short, you really need to keep on top of things and understand how credit-card payments really work in order to pull off your scheme successfully. Note also that the remaining part of that 0% interest balance must be paid off by the end of the period or else a humongous rate of interest will be applied retroactively from Day One, more than enough to blow away all that FD interest. So make sure that you have the cash handy to pay it off in timely fashion when it comes due."
The best way is to approach your bank and fill out a transfer form to send USD to your US account (if you are visiting India). They will require quite a number of proof (AADHAR, PAN, Passport) copies.  Otherwise speak to your bank about how to do a wire transfer from your India A/C to US; after de-moitization regulations have tightened, the best course of action would be to speak to your bank directly. "The Option 2 in your answer is how most of the money is moved cross border. It is called International Transfer, most of it carried out using the SWIFT network. This is expensive, at a minimum it costs in the range of USD 30 to USD 50. This becomes a expensive mechanism to transfer small sums of money that individuals are typically looking at.   Over a period of years, the low value payments by individuals between certain pair of countries is quite high, example US-India, US-China, Middle-East-India, US-Mexico etc ... With the intention to reduce cost, Banks have built a different work-flow, this is the Option 1. This essentially works on getting money from multiple individuals in EUR. The aggregated sum is converted into INR, then transferred to partner Bank in India via Single SWIFT. Alongside the partner bank is also sent a file of instructions having the credit account. The Partner Bank in India will use the local clearing network [these days NEFT] to credit the funds to the Indian account.   Option 3: Other methods include you writing a check in EUR and sending it over to a friend/relative in India to deposit this into Indian Account. Typically very nominal costs. Typically one month of timelines. Option 4: Another method would be to visit an Indian Bank and ask them to issue a ""Rupee Draft/Bankers Check"" payable in India. The charges for this would be higher than Option 3, less than Option 1. Mail this to friend/relative in India to deposit this into Indian Account. Typically couple of days timelines for transfer to happen." I was wondering if I could make part of the payment here in USD legally? Although not directly illegal ... From an India tax and FMEA point of view this would be a bit complicated.  A NRI Seller cannot repatriate the proceeds from sale of house unless he had purchased this from NRE account and repatriation is only possible for original purchase amount. For the gains Seller has to apply for repatriation of funds. A NRI Seller has to pay taxes on gains and this transaction should not look like facilitating a tax fraud in case NRI Seller does not pay his taxes. As a Buyer if you make the purchase from your NRE account [i.e. Move US funds into India into NRE Account], it will ease you ability to repatriate funds in future. Depending on the property value and PAN card availability of seller, you have to deduct 1% to 30.12% tax from the value and deposit this with Income Tax India. PS: It is recommended that you consult a Professional CA to help you with modalities. there is no tax for receiving money from outside of india paypal just take their charges only Western Union, Money to India, Remit to India are some of the services that specilize in remittance and would be cheaper than an International Wire.   There is not tax for transfering your own money earner outside India into India.  Edit: The business of Remittance is bought into the Service Tax Net by Govt. It is seen that Banks are offering this as a service and hence the tax to Banks which is passed on to customers. 0.12% of tax on the converted amount. IE if you transfer Rs 1,00,000/- you would need to pay a tax of Rs 120/-. Above Rs 1,00,000 the incremental rate is 0.06% Every month I will get a return in from my share of the profit which would be used for repayment of capital and interest in India. Not to sure what the business plan is. Please factor all the modalities, Exchange rate fluctuations, etc. My concern is regarding RBI rules and regulations, FEMA guidelines, and Income tax. Under the Liberalized Remittance Scheme; Funds can be transferred outside India. Any profit you make will be taxable in India. You will have to declare this pay tax in as per schedule. "India allows partial convertibility of Rupee on account of ""Capital"". India is moving toward full convertibility in few years. An India can repatriate funds out of India to a limit of 50,000 USD per year [Needs confirmation] ... Consult a professional CA to advice you better." "Its best to check with your company what details they need. Generally for SWIFT Transfers, the below is sufficient;   Additionally any transfers to India require a ""Purpose of Remittance"" to be filled by the company paying to money." "Balance transfer is a specific type of transactions where you use card X to pay off card Y. Assume you have a credit card Y with $1000 current balance. You open a new credit card X, and use the newly approved credit to pay off the balance on Y. You'll pay $30 fee (3% of the balance you're transferring). This doesn't apply to transfers from your checking/savings to the credit card to pay off the balance on that credit card. ""Balance Transfer"" is when you use credit limit of card X to pay off existing balance of card Y, nothing else." A. Kindly avoid taking dollars in form of cash to india unless and until it is an emergency. Once the dollar value is in excess of $10,000, you need to declare the same with Indian customs at the destination. Even though it is not a cumbersome procedure, why unnecessarily undergo all sort of documentation and most importantly at all security checks, you will be asked questions on dollars and you need to keep answering.   Finally safety issue is always there during the journey.  B.There is no Tax on the amount you declare. You can bring in any amount. All you need is to declare the same.  C. It is always better to do a wire transfer.  D. Any transfer in excess of $14,000 from US, will atract gift tax as per IRS guidelines. You need to declare the same while filing your Income Tax in US and pay the gift tax accordingly.  E. Once your fiance receives the money , any amount in excess of Rs 50,000 would be treated as individual income and he has to show the same under Income from other sources while filing the taxes. Taxes will be as per the slab he falls under.  F.Only for blood relatives , this limit of 50,000 does not apply.  G. Reg the Loan option, suggest do not opt for the same. Incase you want to go ahead, then pl ensure that you fully comply with IRS rules on Loans made to a foreign person from a US citizen or resident. The person lending the money must report the interest payment as income on his or her yearly tax return provided the loan has interest element. No deduction is allowed if the proceeds are used for personal or non-business purposes.In the case of no-interest loans, most people believe there is no taxable income because no interest is paid.  The IRS views this seriously and the tax rules are astonishingly complex  when it comes to no-interest loans.  Even though no interest is paid to the lender, the IRS will treat the transaction as if the borrower paid interest at the applicable federal rate to the lender and the lender subsequently gifted the interest back to the borrower.The lender is taxed on the imaginary interest income and, depending on the amount, may also be liable for gift tax on the imaginary payment made back to the borrower. Hope the above claryfies your query. Since this involves taxation suggest you take an opinion from a Tax attorney and also ask your fiance to consult a Charted Accountant on the same. Regards As an Indian resident you can open an Resident Foreign Currency Account, i.e. an USD account. This facility is provided by all major banks.  I am not sure if PayPal would transfer money to these accounts or would convert. The alternative is to give this account number along with other Bank details to the company in US and ask them to send money via remittance services. "Many people who do transfer a balance from one credit card to another have no clue as to what is going on and how credit cards work. If you transfer a balance from one credit card to another, you are charged a fee of anywhere from 3% upwards (subject to a minimum of $10 or so) up front. If Credit Card A has balance $1000 and you transfer it to Credit Card B which is offering no interest for a year on the transferred balance, you owe Credit Card B $1050 (say). In most cases, that $50 has to be paid off as part of the following month's bill. If you are carrying a revolving balance on Credit Card B, that $50 will typically be charged interest from the day of the transfer. Your monthly bill will not (necessarily) include that $1000  you owe for one year or six months or whatever the transfer agreement you accepted says. If you tend to pay anything less (even a penny) than  full payment of each month's bill on Credit Card B, your partial payment will be applied to that $1000 first, and anything left over will be applied to the monthly balance. In short, if you don't pay in full each month, that $1000 will not be ""yours"" for a year; you may end up paying $50 interest for  borrowing $1000 for just one or two months, and the rest of your balance is the gift that keeps on giving as the credit card company likes to say. UPDATE: This has changed slightly in the United States. Any amount paid over the minimum amount due is charged to the higher-interest balances. So in this case, if you had $1000 at a 0% promotional rate and a regular balance of $500, and the minimum payment was $100, and you paid $150, $100 would pay down the promotional balance, and the extra $50 would pay down the regular balance.  About the only way to make the deal work in your favor is to Transfer money only if you have paid the full amount due   on the last two statements before the date of the transfer and are   not carrying a revolving balance. Check your monthly statements   to make sure they show Finance Charge of 0.00.  Many people have   never seen such a sight and are unaware that this can be observed   in nature. Make sure that you pay each month's bill in full (not   the minimum monthly payment due) each month for a whole year   after that. Make sure that the bill containing that $1000 (coming out a   year after the transfer date) is also paid in full. Very many credit-card users do not have the financial discipline to go through with this program.  That is why credit card companies love to push transfer balances on consumers: the whole thing is a cash cow for them where they in effect get to charge usurious rates of interest without running afoul of the law. $50 interest for a one-year loan of $1000 is pretty high at current rates; $50 interest for a two or three month loan where the customer does not even notice the screwing he is getting is called laughing all the way to the bank. See also the answers to  this question" Online money transfer facility from Axis Remit is a quick and easy way to transfer money from USA to India. AxisRemit is Axis Bank's flagship inward remittance service enables you to transfer money to your beneficiaries through the most efficient channels like online money transfer, exchange houses and money transfer operators. A balance transfer is paying one debt instrument with another.  While this is typically seen in credit card offers it isn't necessarily confined to credit cards. Obviously the only reason to do this is refinancing debt to a lower interest rate.  You need to watch for loads on the incoming money, there may be an upwards of 5% fee.  This calculation is materially different than your APR.  Monthly interest charges can be estimated by taking your APR divided by 12 times your balance.  So a 15% APR will have a rough monthly interest charge of 1.25%.  The 5% balance transfer fee is 4x your normal interest charge.  That fee is added to your balance and now you pay interest on the whole amount.  You need to ensure the new rate is low enough to actually benefit you after the incoming fee. In case the other ATM is visa enabled, many bank allows transfer to visa card through their ATM. More details about your banks are required for a very specific answer. I suppose both banks are Indian Bank, which bank ?