S0304 Purpose Code: Travel for medical treatment

Purpose code S0304 is used when a resident individual pays an overseas hospital or medical provider for travel and treatment expenses abroad.

What is the S0304 purpose code?

Purpose code S0304 is used when a resident individual sends money abroad to cover travel and medical treatment expenses outside India. It covers payments to foreign hospitals, clinics, doctors and other recognised healthcare providers, along with necessary travel costs linked to that treatment. It does not apply to business-related medical insurance or general travel for tourism, which fall under other travel purpose codes. Under RBI FEMA guidelines, this outward payment is classified under travel and reported accordingly.

When to use S0304 purpose code?

Use S0304 when you are sending money under the Liberalised Remittance Scheme, within the USD 250,000 annual limit, to pay for medical treatment and associated travel abroad for yourself or an eligible family member. It is the correct RBI purpose code for hospital bills, specialist fees, diagnostic procedures and related medical travel costs overseas. S0304 covers the medical travel and treatment itself, not unrelated tourism or business travel.

When to use a different code:

• Use this code when the primary reason for travel is medical treatment rather than tourism
• Use this code when remitting to a hospital, clinic or doctor abroad for treatment and associated medical costs
• Use the matching P code when you are receiving money rather than paying

Who typically uses S0304 purpose code?

Resident Indian individuals using their Liberalised Remittance Scheme limit to pay foreign hospitals, clinics or doctors for medical treatment and related travel abroad for themselves or close family. It applies whether you are salaried, self-employed or retired, as long as the remittance is a personal payment for medical travel and stays within the USD 250,000 per financial year LRS cap.

Examples of transactions covered

• Payment to an overseas hospital for a scheduled surgery and inpatient care for a family member
• Advance deposit to a foreign medical centre for a planned treatment package, including pre-operative tests
• Fees to an international specialist clinic for a diagnostic procedure and follow-up consultation
• Remittance to a hospital abroad to settle final bills for emergency treatment received during a medical trip

When NOT to use S0304 purpose code

• The travel is primarily for tourism or holiday purposes rather than medical treatment (use the appropriate tourism travel code)
• The remittance is for business travel, conferences or official visits rather than personal medical care (use the relevant business travel code)
• The payment is for overseas health insurance premiums or long-term medical coverage rather than a specific treatment trip (use the appropriate insurance or service import code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S0304, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S0304 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Obtain medical documents and estimate: Get a detailed estimate, admission letter or invoice from the foreign hospital or medical provider stating the treatment and charges.
2. Check your LRS utilisation: Confirm that your total remittances, including this medical travel payment, are within the USD 250,000 annual LRS limit for the financial year.
3. File Form 145: Submit the declaration before remitting, with Form 146 from your CA where the taxable amount exceeds ₹5 lakh in the Tax Year.
4. Complete Form A2: State the purpose of the outward remittance as S0304 and submit the supporting documents to your bank.
5. Get your MT103: Once the payment is sent, request the SWIFT MT103 as proof and retain your Form A2 and LRS records for your files.

Common mistakes to avoid

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Using a general travel code: Tagging a medical treatment trip as generic tourism travel instead of S0304, which can confuse both your bank and future tax reviews.
2. Code and invoice mismatch: The code not matching what your hospital estimate or invoice describes, which flags the payment for extra checks.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not clearly covered by the specified exemptions, which carries a ₹1,00,000 penalty per instance if you are wrong.
4. Incomplete documents: Missing LRS declaration, medical estimate, invoice or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete personal KYC or an incorrect PAN entry stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying S0304 to money coming in from abroad instead of using the matching P code for receipts.

How Skydo helps Indian businesses with cross-border payments

S0304 covers personal remittances under the Liberalised Remittance Scheme, which sit outside the PA-CB framework and which Skydo does not process. If you also invoice foreign clients or pay overseas vendors, here is where Skydo fits.

1. Complete onboarding: Share PAN, Aadhaar and business details. Setup is fully online and takes about five minutes.
2. Get virtual account details: Receive from international clients in USD, GBP, EUR and other currencies they already pay in.
3. Pay your overseas vendors: Send payments to foreign suppliers, software platforms and service providers under Skydo's outward approval.
4. Documentation in one place: Your invoices, remittance records and payment proofs stay together for your CA and your AD bank.
5. A rate you can see: The live mid-market rate with a transparent fee, instead of a markup hidden inside the bank's rate.