S1301 Purpose Code: Remittance for family maintenance and savings

Purpose code S1301 is used when an Indian resident pays money to close family members abroad for their regular maintenance or for building their savings.

What is the S1301 purpose code?

Purpose code S1301 is used when an Indian resident sends money abroad to support close family members or contribute to their savings. This typically covers recurring maintenance payments such as living expenses, rent support, education-related upkeep, or amounts parked overseas in a family member’s account as savings. It does not cover payments for specific services, investments, property purchases, or business transactions, which fall under different RBI purpose codes. Under RBI FEMA guidelines, this outward payment is classified under Secondary Income and reported accordingly.

When to use S1301 purpose code?

Use S1301 when you are remitting funds under the Liberalised Remittance Scheme to support the day-to-day living, education-related upkeep, or savings of your close family members who reside outside India. It is the correct RBI purpose code for personal family maintenance or savings remittances, within your overall USD 250,000 annual LRS limit per financial year. S1301 is for family support and savings, not for paying for services, investments, or asset purchases.

When to use a different code:

• Use the appropriate travel-related code when the payment is for your own foreign travel costs such as tickets, hotels or tour packages
• Use the appropriate investment-related code when the payment is for buying shares, property or other assets abroad
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1301 purpose code?

Resident individual Indians who send money to close family members abroad for their regular support or to build savings in a family member’s overseas bank account use S1301. It applies to personal remittances under the Liberalised Remittance Scheme, subject to the USD 250,000 per financial year limit for each resident individual.

Examples of transactions covered

• Monthly remittance to a child studying abroad to cover living expenses and local transport
• Regular transfer to parents or siblings settled overseas to support their rent and household bills
• Annual lump sum sent to a spouse’s foreign bank account as long-term family savings
• Quarterly support payment to a dependent relative abroad to meet their medical and day-to-day costs

When NOT to use S1301 purpose code

• The payment is for your own foreign travel, such as air tickets, hotels or tour packages (use an appropriate travel-related code)
• The payment is for buying shares, mutual funds, bonds or other financial investments abroad (use an appropriate investment-related code)
• The payment is for purchasing residential or commercial property outside India (use an appropriate overseas property purchase code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S1301, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1301 Purpose Code declared?

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

1. Confirm family details: Identify the overseas family member, their bank account, relationship to you, and the maintenance or savings purpose of the remittance.
2. Check your LRS limit: Ensure that this remittance, together with all your other LRS remittances in the financial year, stays within the USD 250,000 cap.
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 S1301 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 record.

Common mistakes to avoid

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

1. Mixing maintenance with investment: Tagging an overseas investment or property purchase as family maintenance or savings when it should use a capital or investment-related code.
2. Code and invoice mismatch: The stated purpose under S1301 not matching the documents or explanation given to the bank, which flags the payment.
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, relationship proof or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying S1301 to money coming in from abroad instead of the matching P code.

How Skydo helps Indian businesses with cross-border payments

S1301 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.