S1307 Purpose Code: Outflows on account of migrant transfers including personal effects

Purpose code S1307 is used when an Indian resident pays a person abroad for migrant transfers, including sending money for personal effects and related support.

What is the S1307 purpose code?

Purpose code S1307 is used when an Indian resident sends money abroad as a migrant transfer, including amounts linked to personal effects and support for someone who has moved overseas. It typically covers remittances that accompany or support migration, such as funds sent to help with settling in and dealing with personal belongings. It does not apply to regular family maintenance transfers, which are usually reported under S1301. Under RBI FEMA guidelines, this outward payment is classified under Secondary Income and reported accordingly.

When to use S1307 purpose code?

Use S1307 when you are sending money abroad as a migrant transfer, including payments linked to personal effects or support for someone who has migrated outside India. It is the correct RBI purpose code for these specific migrant related payments under the Liberalised Remittance Scheme, subject to the overall limit of USD 250,000 per financial year for a resident individual. S1307 covers migrant transfers as income type flows, not trade or investment transactions.

When to use a different code:

• Use the purpose code for family maintenance when the payment is regular support to close relatives abroad rather than a migrant transfer
• Use the purpose code for import of goods when the payment is for purchasing or shipping physical items instead of a migrant transfer
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1307 purpose code?

Resident individuals who send money abroad as migrant transfers, including support linked to a move overseas and associated personal effects, typically use S1307 under the Liberalised Remittance Scheme within the USD 250,000 annual limit. It is generally not used by businesses, since regular trade, service imports or investments fall under other specific RBI purpose codes.

Examples of transactions covered under S1307

• Remittance by an individual to a family member who has recently migrated abroad to help with initial settlement expenses and handling personal belongings
• Payment sent overseas to cover costs related to transporting and arranging personal household effects for someone who has moved out of India
• Lump sum amount transferred to a relative who has permanently relocated abroad, treated as a migrant transfer rather than ongoing maintenance
• One time support payment to assist a family member in setting up housing and basic needs after emigrating from India

When NOT to use S1307 purpose code

• The payment is regular family support for relatives living abroad rather than a migrant transfer (use the purpose code for family maintenance instead)
• The payment is for purchasing or importing goods or household items from overseas (use the relevant import of goods purpose code instead)
• The payment is for professional services, tuition fees or medical treatment abroad (use the specific service, education or medical treatment purpose code instead)
• You are receiving money rather than paying (use the matching P code)

Documents required for S1307

To send a payment under S1307, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1307 Purpose Code declared?

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

1. Confirm the migrant transfer: Identify that the remittance is a migrant transfer linked to a move abroad and personal effects, rather than regular family maintenance or a trade transaction.
2. Check your LRS limit: Ensure your total outward remittances under the Liberalised Remittance Scheme, including this one, stay within the USD 250,000 per financial year 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 S1307 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.

Common mistakes to avoid with S1307

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

1. Misclassifying regular support: Tagging normal monthly family maintenance as a migrant transfer under S1307 instead of using the appropriate family maintenance purpose code.
2. Code and invoice mismatch: Using S1307 when documents or declarations clearly show a trade, service, education or investment purpose, which flags the payment at the bank.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not on the specified list of exempt remittances, which can invite a ₹1,00,000 penalty per instance.
4. Incomplete documents: Missing LRS form, purpose proof or Form A2, so the bank holds the remittance until you provide them.
5. Missing PAN or KYC: Incomplete PAN, identity or address verification stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying S1307 to money coming into your account instead of using the matching P code for inward migrant transfers.

How Skydo helps Indian businesses with cross-border payments

S1307 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.