S1303 Purpose Code: Remittance towards donations to religious and charitable institutions abroad

Purpose code S1303 is used when an Indian resident pays a foreign religious or charitable institution abroad as a donation under the Liberalised Remittance Scheme.

What is the S1303 purpose code?

Purpose code S1303 is used when an Indian resident sends money abroad as a donation to a religious or charitable institution outside India. It covers voluntary contributions to foreign churches, temples, mosques, international NGOs, foundations, trusts and similar not-for-profit bodies for religious or charitable work. The code is not meant for paying membership fees or buying services from these organisations, which should be tagged under the relevant service import purpose code. Under RBI FEMA guidelines, this outward payment is classified under Secondary Income and reported accordingly.

When to use S1303 purpose code?

Use S1303 when you are remitting funds under LRS as a personal donation to a religious or charitable institution located outside India, within your USD 250,000 annual limit per financial year. It is the correct RBI purpose code when the payment is a genuine donation to a foreign not-for-profit organisation, not linked to any business service you receive. S1303 covers personal donations, not payments for services or commercial benefits.

When to use a different code:

• Use the dedicated education purpose code when the payment is for overseas tuition or school or college fees
• Use the appropriate medical treatment purpose code when the payment is for hospital or medical expenses abroad
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1303 purpose code?

Resident Indian individuals who donate personal funds to churches, temples, mosques, charities, foundations or international NGOs abroad under the Liberalised Remittance Scheme, subject to the USD 250,000 annual limit. It does not apply to Indian companies making CSR or business-related contributions, which should use the relevant business remittance purpose code instead.

Examples of transactions covered

• Personal donation to an overseas church or religious organisation for its community work
• Contribution to an international charity or NGO registered abroad for disaster relief or humanitarian aid
• Annual donation to a foreign foundation supporting education or healthcare in developing countries
• One-time gift to a temple or religious trust located outside India during or after an overseas pilgrimage

When NOT to use S1303 purpose code

• The payment is for overseas tuition fees or other education expenses and not a donation (use the appropriate education purpose code)
• The payment is for hospital bills or medical treatment abroad and not a donation (use the relevant medical treatment purpose code)
• The payment is a business-related contribution, sponsorship or fee paid by your company (use the relevant business or service import purpose code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S1303, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1303 Purpose Code declared?

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

1. Confirm the donation: Identify the foreign religious or charitable institution you are donating to and obtain their bank details and any donation request or acknowledgement.
2. Check your LRS limit: Make sure your total outward remittances, including this donation, stay within the USD 250,000 annual limit per financial year for resident individuals.
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 S1303 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 Form 145 records.

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 donation with payment for services: Tagging fees for events, courses or services from an institution as a donation under S1303 when they actually belong under a service import code.
2. Code and invoice mismatch: The code not matching what your documents describe, for example using S1303 when the remittance is clearly for education or medical treatment.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not on the specified exemption list, which carries a ₹1,00,000 penalty per instance if your assumption is wrong.
4. Incomplete documents: Missing LRS declaration, evidence of the overseas institution 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 S1303 to money coming in instead of using the corresponding P purpose code for donations received.

How Skydo helps Indian businesses with cross-border payments

S1303 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.