India taxes individuals based on a system of income slabs. Different tax rates are assigned to different ranges of income.&nbsp;

Understanding tax slabs is crucial for several reasons.

As a person earns more, the tax liability also increases, creating a fair and progressive tax system in the country. To achieve this, the government regularly updates and announces changes to tax slabs in the Union Budget.

The income tax slabs differ between the old and new tax regimes. Let's explore the specific slab rates applicable to Individuals for FY 2022-23 (AY 2023-24) and FY 2023-24 (AY 2024-25).

Income Tax Slab Rates For FY 2023-24 (AY 2024-25)&nbsp;

Rates of the old tax regime slabs are categorized into three groups:

The new tax regime applies uniform tax rates to all individuals, eliminating the age-based distinctions in the old system. The new tax regime slabs 2023-24 are outlined below.

Applicability of Surcharge for FY 2023-24 (AY 2024-25)

The income tax <a href="https://incometaxindia.gov.in/charts%20%20tables/tax%20rates.htm">surcharge</a> is an extra fee imposed on top of the <a href="https://www.skydo.com/blog/how-to-file-taxes-under-44ada?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">regular income tax</a>. An additional tax is applied to individuals with higher income earnings in a specific financial year. Let’s look at the applicable surcharge rate under the Old and New tax regime.

However, 25% or 37% surcharge rates will not apply to income under the following sections.

Consequently, the highest surcharge rate on the tax payable for such incomes will be 15%.

Starting from the Assessment Year 2023-24, the maximum surcharge rate on tax payable for dividend income or capital gain specified in Section 112 will be capped at 15%.&nbsp;

A 4% Health and Education cess will be applied to all cases’ total income tax liability and surcharges.

Comparison of tax rates under the New tax regime and the Old tax regime for FY 2022-23 (AY 2023-24)

How do you calculate the income tax from the income tax slabs?

Let’s understand the calculation with an example.

Sanjana, aged 35, has a total taxable income of Rs. 8,50,000. She has opted for the old tax regime. Her income includes income from salary, interest and rental income. Deductions under section 80 have been reduced. Now, Sanjana wants to know her <a href="https://www.skydo.com/blog/gst-requirements-international-service-sales?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">tax liability</a> for FY 2022-23 (AY 2023-24).

*Sanjana, an individual taxpayer under the age of 60, enjoys an income exemption limit of up to Rs 2,50,000. Other taxpayers, i.e., senior and super senior citizens, have higher income tax exemption thresholds of Rs 3,00,000 and Rs 5,00,000, respectively.

Please be aware that the tax rates in the New Tax Regime are uniform for all categories of individuals, including regular individuals, senior citizens, and super senior citizens.&nbsp;

Individuals with a net taxable income of up to Rs 5 lakh qualify for a tax rebate under section 87A, resulting in zero tax liability in both the New and Old tax regimes. It's important to note that in Budget 2023, the rebate under the new regime has been extended, making income up to Rs 7 lakh tax-free from the FY 2023-24 onward.

Let's delve into effective strategies to maximize your investments while minimizing the associated tax burdens.

ELSS mutual funds provide a dual benefit of potential capital appreciation and tax savings under Section 80C of the Income Tax Act. Investing in ELSS reduces taxable income and offers a path for long-term wealth growth.

2. Explore tax-efficient investment avenues

Health insurance qualifies for tax benefits under Section 80D. You can claim tax benefits on premiums paid - up to Rs 20,000 for senior citizens and Rs 15,000 for others. For example, if you pay Rs 15,000 for your policy and Rs 20,000 for your senior citizen parent, you can claim a total tax benefit of Rs 35,000.&nbsp;

Maturity value is tax-free for sums received under critical illness insurance policies.

This strategy entails selling loss-making assets to realize the capital loss and using it to offset the gains earned by profit-making assets.

For instance, if you have a loss of Rs. 20,000 in Stock A and a gain of Rs. 30,000 from Stock B, you can sell Stock A during a market downturn to offset the gains. This way, you can reduce your taxable income. The saved amount can be reinvested for portfolio growth.

Ensure that tax loss harvesting aligns with your overall financial goals and plan by considering a discussion with a financial professional or tax advisor.

<a href="https://www.skydo.com/blog/how-can-the-right-chartered-accountant-help-your-tech-export-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Consult financial professionals or tax advisors</a> for effective tax planning and strategic advice. Their expertise can provide tailored insights aligned with your financial goals and ensure a well-informed approach to optimize your tax situation.

If you need help deciding what is right for you, we will connect you with our panel of Indian and US-based CA / CPAs. Feel free to reach out to us.

Q1. How is a taxpayer's income categorized?

Ans: A taxpayer's income falls into five categories outlined in Section 14 of the Income Tax Act. These include Income from salary, Profits from a business or profession, Income from House Property, Capital Gains, and Income from Other Sources.

Q2. Is it possible to avail of 80C deductions while choosing the new tax slabs 2023-24?

Ans: No, under the new tax regime, several deductions and exemptions, including those under section 80C, are not permitted. Opting for the new tax regime means foregoing the ability to claim deductions under section 80C.

Q3. What do "Previous Year" and "Assessment Year" mean?

Ans: We have two important terms in income tax provisions: (i) Previous Year and (ii) Assessment Year. Previous Year is when you earn income, typically from April 1st to March 31st. The year right after the Previous Year, from April 1st to March 31st, is called the 'Assessment Year.'

For example, the Previous Year is from April 1, 2023, to March 31, 2024 (FY 2023-24). The corresponding Assessment Year is from April 1, 2024, to March 31, 2025 (AY 2024-25).

Q4. What is the tax exemption limit for calculating income tax rebate under section 87A?

Ans: For FY 2023-24 (AY 2024-25), the rebate limit has been increased to Rs. 7,00,000 under the new tax regime. This means a resident individual with taxable income up to Rs 7,00,000 will receive Rs 25,000 or the amount of tax payable (whichever is lower) as tax relief. However, the old tax regime's threshold limit will remain the same, i.e., Rs 12,500 if taxable income is up to Rs 5,00,000.

Q5. How much is the standard deduction for FY 2023-24?

Ans: You can claim a standard deduction of ₹50,000 to the income taxable under the head ‘Salaries.’ The standard deduction is a tax benefit that can be claimed irrespective of the amount spent on Transport or Medical Allowance. It applies to individuals earning a salary or pension income.

Prepare for the upcoming year's tax season by understanding the tax slabs for 2023-24 and optimizing your tax savings. 

Tax Slabs in 2023-24: Plan Ahead for Next Year Tax Savings

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Rohit Khuranna

GST applies to everything you purchase, from utilities to professional services. However, if you provide services abroad and receive international transfers and remittances, does GST apply to them? For instance, if you provide IT services to the U.S. from India, should you pay GST on <a href="https://www.skydo.com/blog/real-time-tracking-of-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">foreign exchange</a>? If yes, how should you go about it?&nbsp;

This blog explains the GST’s applicability to various foreign exchange payments and how to manage such transactions.&nbsp;

Under the GST regime, the export of goods and services is considered a zero-rated supply since the consumption of goods or services happens outside India. Therefore, GST isn’t applicable as a separate charge over <a href="https://www.skydo.com/blog/time-taken-for-inward-remittances?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">inward remittances</a> to India.

For instance, if you are an IT services exporter dealing with foreign clients, you're exempt from paying additional GST on the money you receive as payments from your clients abroad.

Some <a href="https://www.skydo.com/blog/how-you-can-streamline-international-transactions-for-your-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">online platforms</a> may charge an 18% transaction fee for certain products during international money transfers. Importantly, this fee doesn't mean there's an additional GST on the foreign remittance transaction itself.

2. Compliance Handling and Certifications (FIRC &amp; BRC)&nbsp;

GST applies to services relating to compliance handling and issuing <a href="https://www.skydo.com/blog/all-you-need-to-know-about-FIRC-a-complete-guide?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">FIRC</a> and <a href="https://www.skydo.com/blog/what-is-e-BRC?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">BRC</a> in India.

What makes this situation different is the "reverse charge mechanism." This is where the responsibility of paying GST shifts from the service provider to the foreign clients.&nbsp;

Thus, foreign clients are now directly responsible for remitting GST to the Indian government, relieving the service provider of this financial obligation.

You don’t need to charge GST on international transactions separately on the invoices whenever you provide services to foreign clients. Your clients directly pay GST to the Indian government on the foreign exchange conversion.

This simplified approach streamlines the <a href="https://www.skydo.com/blog/should-i-invoice-in-inr-or-foreign-currency?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">billing process</a> for both the service provider and international clients.

If you receive $1000 for exporting services and convert it into Indian Rupees, 18% GST would apply to the foreign currency conversion transaction.

The value of service in purchases/sales of foreign currency is determined as per the table below, upon which a GST of 18% is applicable.

Transactions amongst banks or authorized dealers are exempt under GST regulations.

What Next: Managing Foreign Exchange Transactions

When engaging in <a href="https://www.skydo.com/blog/how-much-forex-fees-do-you-pay-on-global-transactions?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">forex</a> transactions, opting for authorised channels to stay compliant with regulations is advisable. Make your financial life easier by creating <a href="https://www.skydo.com/blog/gst-bill-format-what-it-includes?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">invoices</a> that separate taxable and non-taxable items.

If you're searching for a reliable payment partner to guide you through complexities, <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo's</a> automated and compliant solutions can assist.&nbsp;

Visit <a href="https://www.skydo.com/blog/gst-requirements-international-service-sales?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">the blog</a> to learn more about the nuances of handling GST.

Q1. What do “goods” and “services” mean under GST?

Ans. As per Section 2(52), CGST Act, 2017, “Goods” mean any kind of movable property other than money and securities. It includes actionable claims, growing crops, grass, and things attached to or forming part of the land, which are agreed to be served before supply or under a contract of supply.&nbsp;

As per Section 2(102), CGST Act, 2017, “Services” mean anything other than goods, money, and securities. It includes activities relating to the use of money or its conversion by cash or any other mode from one form, currency, or denomination to another form, currency, or denomination for which a separate consideration is charged.

Q2. Is GST applicable on international transactions?

Ans. GST does not apply to international transactions in India. GST is designed for goods and services consumed within the country. International transactions involving the cross-border movement of money are typically exempt from GST.

Q3. What is the meaning of zero-rated supply?

Ans. According to Section 16, IGST Act, zero-rated supply means any of the following supplies of goods and services.

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There has been notable growth in the payments industry in the last ten years, driven by technological advancements and user experience improvements.

The emergence of a new cohort of payment processors, payment methods, value-added services, and infrastructure providers has further accelerated this progress. These innovations respond to the increasing customer demand for more straightforward payment procedures, especially online payments.

This blog will shed light on embedded payments and how they are helping businesses streamline their payment processes. 

<a href="https://blog.payjunction.com/embedded-payments">Embedded payments</a> are where customers can click a single natively available payment link on a website and choose from various payment options. They allow companies to ensure customers do not have to leave their websites or mobile applications to pay for a product or service.&nbsp;

For example, if you are buying a product from Amazon, embedded payments allow you to make online payments for the product without having to leave the website or the app. Furthermore, you can choose from multiple payment methods at your convenience.&nbsp;

Most embedded payments fall under the umbrella of embedded <a href="https://www.skydo.com/blog/global-finance-made-easy-with-skydo?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">finance.</a> Embedded finance definition refers to a process, where third-party payment providers such as banks and financial institutions offer their services to execute single-click payments. In most cases, embedded payments are executed with pre-saved payment credentials on the websites or the apps.&nbsp;

Embedded payments differ from traditional checkout processes, as in traditional checkouts, users are redirected to a separate payment page hosted by a third-party payment provider. This page may have a different look and feel from the rest of the website, which may be a less smooth and cohesive user experience.&nbsp;

<a href="https://www.adyen.com/knowledge-hub/embedded-payments">Embedded payments</a> are made possible and successful because third-party providers developing API tools. These API tools allow these third-party payment providers to integrate their payment systems on other websites and mobile applications.&nbsp;

For tech-enabled platforms and mobile applications, embedded payments work using two methods–natively or through utilising a third-party provider.&nbsp;

1. Registered Payment Facilitator (PayFac)

<a href="https://blog.payjunction.com/embedded-payments">The PayFac model </a>is used by big companies such as Shopify, Uber, Stripe, etc. The payment provider encourages companies to facilitate transactions on their behalf directly from the websites or mobile apps. The companies integrate a processor or payment gateway into their platforms for seamless transactions.&nbsp;

The processor or the payment gateway works as an information intermediary between the platform and the customer’s bank and completes payments by securely transferring financial information. In such a case, customers can also save their payment credentials for the future to avoid entering the details every time and make faster payments.&nbsp;

A perfect example of the PayFac model is Uber, where you can book cabs and make immediate payments without leaving the app. Here, Uber works as a registered payment provider, permitted by available embedded finance providers to execute payments on their behalf.&nbsp;

Companies that aren’t substantially funded or have high resources look towards payfac-as-a-service. It provides all the advantages of embedded payments but in a cost-efficient way, that is simpler to execute and integrate.&nbsp;

The model requires companies who want embedded links on their platforms to work with third-party payment providers who facilitate embedded payments for businesses without requiring them to build the payment system natively.

A perfect example of payfac-as-a-service Paytm, registered with numerous banks and financial institutions but extends its services to other businesses to use its PayFac model to complete payments.&nbsp;

A full-service partnership is one of the most effective embedded payment models as it allows ISVs (independent software vendors), developers, and their customers to have a robust payment solution.&nbsp;

The partnership involves tightly integrating payment processing functionalities, and the platform providing the service takes care of all the included factors, such as pre-sales demos, pricing, <a href="https://www.skydo.com/blog/effective-sales-and-marketing-strategies-for-sole-proprietors?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">marketing</a>, onboarding, setup, and customer support.&nbsp;

Embedded payments eliminate the need for users to navigate to external payment gateways, streamlining the purchasing process and reducing the likelihood of abandoned carts. They also facilitate subscription and recurring billing models, enabling businesses to establish predictable revenue streams and enhance customer retention.

Integrated payment systems allow for strategic placement of upselling and cross-selling prompts during checkout, boosting opportunities to increase the average transaction value. All these factors allow for increased revenue by reducing friction in the purchasing process.&nbsp;

<a href="https://gocardless.com/en-us/guides/posts/what-are-embedded-payments/">Embedded payments</a> can automate tasks such as invoicing, reconciliation, and financial reporting, reducing the administrative burden on businesses. The effective integration provides real-time insights into transaction trends, customer behaviour, and other relevant metrics.

Embedded payments can help businesses comply with industry regulations and standards, such as the PCI DSS (Payment Card Industry Data Security Standard), by providing secure and compliant payment processing.&nbsp;

Embedded payments eliminate the need for users to input payment details repeatedly, offering convenience and speed. They come with robust security measures, instilling trust among customers. Furthermore, a smooth payment and user experience contributes to customer loyalty.&nbsp;

Embedded payments can facilitate entry into new markets by accommodating diverse payment methods preferred by customers in different regions. Businesses can innovate and optimise their strategies based on customer behaviour, preferences, and market trends as they can access payment data.&nbsp;

Implementing embedded payments positions businesses for the future, as it allows for flexibility in adapting to evolving payment technologies and consumer expectations

Best Practices for Implementing Embedded Payments

Provide various secure payment options, including credit/debit cards, digital wallets (e.g., PayPal, Apple Pay, Google Pay, UPI interface), and alternative payment methods. Ensure that all payment methods adhere to industry security standards and are highly secure.&nbsp;

Stay informed about and comply with relevant regulations, such as the Payment Card Industry Data Security Standard (PCI DSS). Furthermore, regularly audit and assess security measures to address any vulnerabilities.

Communicate <a href="https://www.skydo.com/blog/unlock-transparent-pricing-and-maximize-cost-savings-with-skydo?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">pricing details</a>, including transaction fees, before checkout. Avoid hidden or unnecessary charges to build trust and transparency. Clearly define the terms and conditions that may affect the payment terms, such as GST, refund policy, etc.

Create a simple and intuitive user interface for the checkout process. Minimise the number of steps required for a transaction to reduce user friction. Implement auto-fill features for forms and "Remember Me" options for returning users to reduce the effort required for repeat transactions.

The advent of embedded payments has revolutionised the way businesses engage with their customers and conduct transactions. Integrating seamless and secure payment functionalities directly into platforms and applications provides convenience and efficiency and enhances user experiences.

By offering a diverse array of secure payment options, ensuring rigorous user data security, complying with relevant regulations and providing transparent payment information, businesses can build trust and credibility in the minds of their customers. 

However, you must analyse and compare the different embedded payment models to ensure you choose the most suitable one for your business. In case of confusion, consulting an expert is the best solution.&nbsp;FAQs

Q1. What are the risks of using embedded payments?

Ans: Embedded payments come with certain risks, such as data security concerns, inadequate regulatory compliance, integration challenges, dependency on third-party infrastructure, and transaction errors.&nbsp;

Ans: <a href="https://www.brandloom.com/10-best-payment-gateways-in-india">Embedded payments</a> do not come with a cost for customers, but businesses have to pay a specific cost to the embedded payment provider. The costs range between 0.50% to 2% per transaction.&nbsp;

Q3. Do I need to be a financial expert to implement embedded payments?

Ans: While having a background in finance or expertise in financial matters can be beneficial, it's not a requirement to implement embedded payments. You can employ technical experts or take a full-service partnership to implement them.&nbsp;

Q4. What kind of platforms are suited for embedded payments?

Ans: You can implement embedded payments across platforms like e-commerce, mobile apps, subscription platforms, digital wallets, booking platforms, SaaS platforms, etc.&nbsp;

Q5. How can I get started with embedded payments?

Ans: You can start with embedded payments by understanding all three payment models and choosing the most suitable one. Thereafter, you can contact the service providers and create a business synergy. Integrating the required software in your platform is important to ensure successful embedded payment integration.

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Cash flow is the lifeblood of any business, and late cross-border payments can bleed through your operational costs. From missed opportunities to strained relationships, delays in foreign or inward remittances have a significant impact. 

This blog unpacks the payment system intricacies across key markets, to help you navigate the global payment maze and avoid costly delays.

Time Taken For Inward Remittances Worldwide&nbsp;

The central banks of various countries have set frameworks and policies to ensure seamless and secure financial transactions. Like India’s NEFT and RTGS, major countries have their payment networks with distinctive processing times and cost structures. 

Here are the major countrywide payment systems with their processing times.&nbsp;

<a href="https://www.skydo.com/blog/everything-about-ach-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Automated Clearing House, or the ACH network,</a> is an interconnected computer system that communicates with each other to help transfer or receive payments within the US.&nbsp;

The ACH network has evolved from person-to-person payments to allow individuals to utilise the network to make bill payments, pay salaries to employees or make mortgage repayments.&nbsp;

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<a href="https://www.federalreserve.gov/paymentsystems/fedach_about.htm">The National Automated Clearing House</a>, or NACH, governs the payments executed through the ACH network.&nbsp;

Payments made through ACH usually take 1-3 business days to settle. Such payments, called standard ACH payments, differ in cost structure from same-day ACH, which settles the payments on the same day but comes with a higher fee.&nbsp;

<a href="https://tfx.treasury.gov/taxonomy/term/10659#:~:text=The%20Originating%20Depository%20Financial%20Institution,party%20to%20its%20ACH%20operator.">ODFI (Originating Depository Financial Institution)</a> settles regular ACH payments at 8:30 AM on the following business day after initiating debit requests and settles credit requests at 8:30 AM on the following second business day.

<a href="https://www.skydo.com/blog/everything-about-fps-bacs">The Faster Payments Service (FPS)</a> allows the settling of digital financial transactions between two bank accounts registered in the UK. The FPS payment network includes three stakeholders that ensure the successful transaction settlement:

<a href="https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/">Using the Faster Payment Systems,</a> individuals can send up to £1 million, if the bank accounts of both parties are registered in the UK.&nbsp;

FPS payments are settled almost immediately after payment initiation. However, some payments may take up to two hours. Although the upper limit is £1 million, banks set their limit for the maximum amount entities can send per transaction or daily using FPS.

Unlike ACH, which carries an average <a href="https://tipalti.com/payments-hub/ach-fees/#ach-payment-processing-cost">cost of $0.29 per transaction</a>, FPS payments are free for retail customers but carry a fee of <a href="https://www.hellozai.com/blog/a-guide-to-faster-payments-service-fps#:~:text=Although%20Faster%20Payments%20are%20free,two%2C%20however%2C%20is%20speed.">around £2.50 per transaction</a> for corporate customers.&nbsp;

<a href="https://www.skydo.com/blog/what-are-sepa-transfers?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">SEPA, or The Single Euro Payments Area</a>, is a payment network to send and receive payments electronically within Europe. The transfer happens in Euros between two banks or financial institutions in the Eurozone (European region).&nbsp;

Thirty-six countries are members of the SEPA network, and the two bank accounts should be registered in any of the member countries for the SEPA transfers to be completed.&nbsp;

<a href="https://www.ecb.europa.eu/paym/integration/retail/sepa/html/index.en.html">SEPA transfers</a> are generally free of cost, and users can transfer a maximum of €100,000 in one single payment using the Instant Credit facility.&nbsp;

The processing time for SEPA transactions differs based on the four types of payment processing schemes, which are;&nbsp;

Similar to the US, ACH payment networks also allow settling funds in CAD within two bank accounts in Canada. Canada <a href="https://www.payments.ca/payment-resources/iso-20022/automatic-funds-transfer#:~:text=Payments%20Canada%20has%20developed%20the,continued%20support%20throughout%20the%20process.">AFT (Automated Fund Transfer)</a> is another cost-effective and convenient solution.&nbsp;

AFT, called Canada’s version of the ACH, works for both CAD and USD and transfers AFT files three times a day. Once the Canadian banks receive the AFT file, they must process <a href="https://www.linkedin.com/pulse/aft-going-forward-dan-dickinson">payments within two hours.&nbsp;</a>

<a href="https://www.pnc.com/insights/corporate-institutional/go-international/ten-things-you-need-to-know-about-payments-in-canada.html">AFT transactions in Canada</a> include electronic payments, such as direct deposits, bill payments, wire transfers, and online banking transactions. Canadian Payments Association (now part of Payments Canada) oversees and facilitates the electronic payment systems in the country.

<a href="https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/">The New Payments Platform (NPP)</a> was launched in February 2018 as an open-access infrastructure for executing fast payments within Australia.&nbsp;

The NPP enables businesses, households, and government agencies to make simple, near real-time fund transfers 24/7 with no cut-off time. NPP differs from other payment networks as it carries much richer remittance information with each payment message.&nbsp;

In 2022, <a href="https://nppa.com.au/the-company/">NPP merged with BPAY Group</a> and EFTPOS to form the Australian Payment Plus. More than 100 financial institutions offer NPP-enabled financial services to their customers in Australia.&nbsp;

<a href="https://nppa.com.au/faqs/">NPP comes with no transaction limit,</a> but banks can set their own per-transaction or daily limit as per their operating policies. There is no fee involved in making NPP transactions, but banks can set a specific cost for transactions made via products and services on the New Payments Platform.

Before choosing the right payment network, you should compare them based on the urgency of transaction settlement, amount, sender/receiver location, and fee.&nbsp;

Ensure that all recipient information is accurate and complete. Double-check the recipient's name, address, account number, and any other required details.

Initiate remittance transactions well in advance, especially if specific deadlines or time-sensitive requirements exist. Stay informed about the regulatory requirements for inward remittances in both the sending and receiving countries.	

Maintaining open lines of communication with both the sender and recipient and any intermediaries involved in the process can also prove ideal in avoiding processing delays.&nbsp;

Understanding the nuances of remittance worldwide is vital for seamless business transactions, as most countries have payment networks similar to India’s<a href="https://www.skydo.com/blog/differences-between-neft-and-rtgs?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link"> RTGS or NEFT.</a> As these payment networks differ in their processing time and cost structure, they can significantly affect the time taken for inward remittances.&nbsp;

Accuracy in recipient information, early initiation of transactions, and a comprehensive understanding of compliance checks form the foundation for minimising delays. Furthermore, it is vital to analyse and compare the payment networks based on factors such as transfer amount, urgency, and the requirement for bank accounts.&nbsp;

Ans: Remitter meaning in bank refers to the individual or entity that is sending or initiating a remittance. The remitter could be an individual sending money to family members, a business making international payments, or anyone involved in the process of transferring funds across borders.

Q2. What fees are associated with cross-border payments?

Ans: There are numerous <a href="https://tipalti.com/mass-payments-hub/cross-border-payments-guide/">costs associated with cross-border transactions,</a> such as bank fees, transfer fees, currency conversion fees, exchange fees, international money transfer platform fees, and international debit or credit card fees.&nbsp;

Q3. What are the most common payment methods for international transactions?

Ans: The most common payment methods include wire transfers, international debit/credit cards, and online payment platforms.

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For exporters, eBRC (Electronic Bank Realization Certificate) is a key compliance document that serves as proof of payment received from abroad for exported goods or services. It is especially important for goods and software exporters covered under SOFTEX.

In this blog, we’ll break down what eBRC is, why it matters, how to obtain it, and everything else you need to know.

An eBRC (Electronic Bank Realization Certificate) is digital proof that your bank issues once you receive payment for an export. Simply put, it confirms that you’ve been paid for your goods or services.

This certificate is important because it helps you report your earnings, file taxes easily, and even access government benefits meant for exporters including low-cost loans, subsidies, duty exemptions and more.&nbsp;Since eBRC includes all the transaction details, it also makes compliance with authorities like the Income Tax Department smooth and hassle-free.

Before eBRC, getting a <a href="https://www.skydo.com/blog/bank-realisation-certificate-all-you-need-to-know">Bank Realization Certificate (BRC)</a> was a tedious process. Exporters had to visit their bank, apply for a physical BRC, and then submit it to the Directorate General of Foreign Trade (DGFT). The DGFT would manually enter transaction details, making the process slow and complicated—especially for claiming export incentives.

In 2012, the DGFT introduced e`BRC, eliminating the need for physical visits and paperwork. Now, banks issue BRCs digitally, making it faster, easier, and more efficient for exporters to claim benefits and comply with regulations.

In India, banks issue an -BRC to exporters through the following process.

How do you check the eBRC status on the DGFT Website?

Here are the steps to check the status of your eBRC (Electronic Bank Realization Certificate) online.

DGFT has made it mandatory for all exporters to apply for and receive the eBRC to demonstrate that they have received payment for their exported goods or services per DGFT regulations.

The eBRC system provides a digital record of export transactions, making it easier for exporters to maintain and retrieve records for audit and compliance.  Additionally, exporters can avoid visiting the bank and DGFT offices.&nbsp;

One of the main reasons exporters apply for the eBRC is to reap the benefits of various export benefits offered by the Indian government under its Foreign Trade Policy. Submitting an eBRC allows the exporters to be eligible for benefits such as low-cost loans, duty exemptions, subsidies, etc.&nbsp;

Enhancing transparency and accountability

The Indian government and authorities such as the Income Tax Department and the DGFT constantly monitor and manage the country's foreign exchange reserves and tax filing. Issuing e-BRC ensures that the foreign exchange earned through exports is accurately reported and accounted for with effective tax filing.&nbsp;

How to Claim Export Incentives using eBRC

In India, the DGFT decides on the value of the incentives which an exporter can seek under the various export benefits. The value is decided by analysing the Free on Board (FOB) of the exported goods and services mentioned in the shipping bills, and the total received payments per the eBRC.&nbsp;

Here's how you can claim these benefits with eBRC:

However, you must ensure that the bank has submitted an error-free e-BRC and it reflects the consolidated realisation value. Furthermore, you must enter freight values, insurance and commission values in the refund application, as the e-BRC excludes such values.&nbsp;

Here are some key resources and tools that can help you in your endeavour to obtain your e-BRC.

eBRC is a crucial certificate issued by the bank and verified by the DGFT for streamlining the payment procedure for exporters and working as an income proof for better transparency and tax filing.&nbsp;

It is mandatory for an exporter receiving payments for the export of goods and services to apply for eBRC and ensure that the bank uploads it on the DGFT website. Utilising the eBRC, exports can present their eligibility for various export incentives and increase their profit margin.&nbsp;

However, as an exporter, you must maintain accurate records of your export transactions and related documents to facilitate the e-BRC application process. Since the regulations and the procedure may change over time, it's important to stay updated with the latest information from official government sources and industry associations.&nbsp;

You can contact <a href="mailto:support@skydo.com">industry experts at Skydo</a> to help you with the eBRC process and in case you have any other queries related to foreign exchange.&nbsp;

What is e-BRC_ How can you obtain it, and why do you need it th

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The global trade business is more interconnected than ever. Technological advancements have made it possible to connect with buyers globally and track logistics in real-time.

However,&nbsp; receiving cross-border payments through the traditional banking system still remains a cumbersome and expensive process thanks to lengthy processing times, hidden charges, and tax compliance issues. This is where virtual accounts step in, offering an innovative alternative to physical bank accounts. It eliminates the above challenges and simplifies cross-border payments for exporters.

What exactly are virtual bank accounts? How do you even open a virtual account? We answer these questions and a lot more in this blog.

Virtual bank accounts are digital accounts linked to your physical bank account. Each virtual bank account has a unique 18-digit number you can share with your international clients to receive payments. However, virtual bank accounts have one notable difference from physical bank accounts. The difference is they cannot actually hold money, they are like digital delivery agents receiving payments and delivering them to your bank account.

Virtual accounts add two major advantages for exporters:&nbsp;