[AYP]

Hello everyone,

So I have a friend who is in the US and is planning to fly back to India during winters. I am thinking of asking him to get some stuff for me, some small items and most probably, one gaming laptop as well. I was wondering how I am gonna pay him for these items. A simple way(from my perspective) is that I can just convert the dollar amount to INR and pay him the equivalent amount. However, if I put myself in his shoes, this arrangement may not be very ideal for him since his primary residence is the US and and this arrangement shall mean that he'll be losing out on dollars, which is much more useful as a currency for him.

So, how should I go about this guys? How do you guys manage a situation like this?

Thanks.

[binand]

Originally Posted by AYP

So, how should I go about this guys? How do you guys manage a situation like this?

1. Don't put yourself into this situation. Buy things online yourself and use a freight forwarding service.

2. Else, use the friend only to receive the package, pay for the items yourself.

3. If neither 1 nor 2 work, then the one time I ended up in this situation I just bought the friend an Amazon US gift voucher.

[edunata]

Best option is, to buy the item with your credit card and take delivery at your friend's US address. You can save on the International Courier charges.
That you can compensate by giving a treat to him/her, when you receive the item.

[condor]

Did you ask him how he wants the return payment ?

When he is here, he using his US cards can result in conversion charges for him. You could pay him in cash for his use here, or get a charge card that he can use, or pay his parents which they can use for their routine expenses.

[singleton]

I once used Transferwise to pay to the Canadian account (and I bore the exchange fees). Money goes to their account in 2-3 days, and they dont have to worry about conversion etc. So works out the best.

[pandabear]

When someone / you travel abroad please ask them to buy some USD for you there is some limit to which you can bring USD into the country. Keep some USD with you, should solve most issues.

Else you can transfer INR to their parents at a rate that is sweeter for them.

[Tgo]

How I prefer it:

Pay for the stuff in USD using your Indian card and have it delivered to his address in the US. He’ll be just bringing the stuff for you.

You’re anyway saving a ton, don’t worry about a few thousand in currency conversion charges.

I find it a big hassle clarifying incoming transaction to my Indian accounts when filing Indian Taxes. Keep it Simple and honest.

[d.w.w.]

Best way is to ask your friend on how he prefers the money. If he has an active Indian bank account/ pays EMI for properties here/need INR for local shopping etc transfer the money in INR. In this case he will also save some bucks on the USD->INR conversion charges.

For people who are not in need of INR, easiest way is to buy the product with your credit card and have it shipped to their address. Amazon has an inbuilt currency converter and I have found these rates to be cheaper compared to bank charges. Personally, I have kept some $ from my earlier trips to pay friends who prefer USD over INR.

[noo.b]

Simplify it for him as well as you. If its an online purchase do it yourself, have it shipped to him. That way he is just required to carry it back for you. I just did this for my bike's exhaust.

If its offline and your card can't be used pay him via paypal/ offer to get an amazon voucher of equivalent value if he's ok with it, don't wait for his arrival to pay him back. That way you're not burdening him with an expense on your account .

[IamNikhil]

The best way is to buy the items directly by paying via your own credit card and having them shipped to his address in the USA. The conversion charges for an international transaction are nominal, considering you are anyway ending up saving a good amount by buying the items in USA instead of India. That way, your friend only has to carry the items for you on his way here, saving other hassles.

Alternatively, if your friend has an active bank account here in India, you can transfer the respective amount in INR directly to his account.

[sunilrs]

Wise (formerly Transferwise) is the best way to do this, you save on pesky credit card fees and also get a good exchange rate. I often use it to send money to my sister when she purchases items for me in the US before her trips to India. Do remember that it takes 2 to 3 days to credit the amount to their account. The exchange fees are quite reasonable and you can easily bear that cost.

[turbowhistle]

I am an NRI in this case and being a sneakerhead, I get requests from many friends to get Jordans/Sneakers while coming to India. I simply ask them order them directly at home and I act as a courier only, this way I doesn't have to be involved in the financials and not to worry as well. Reduces the risk of people saying no to your requests as well and most CC these days allow international websites so not a problem as well. The money you will spent more on forex fees will still be less than what you will end up saving so not a big deal imo.

Worst case I just accept cash in India which can be used as petty cash for expenses. But then shoes don't cost as much as a big laptop so it's better if you might clear it with him. Remember if he has only NRE account then you can't transfer from India to him, that has to happen to only NRO account.

[AYP]

Originally Posted by edunata

Best option is, to buy the item with your credit card and take delivery at your friend's US address. You can save on the International Courier charges.
That you can compensate by giving a treat to him/her, when you receive the item.

Originally Posted by Tgo

How I prefer it:

Pay for the stuff in USD using your Indian card and have it delivered to his address in the US. He’ll be just bringing the stuff for you.

You’re anyway saving a ton, don’t worry about a few thousand in currency conversion charges.

I find it a big hassle clarifying incoming transaction to my Indian accounts when filing Indian Taxes. Keep it Simple and honest.

Originally Posted by d.w.w.

For people who are not in need of INR, easiest way is to buy the product with your credit card and have it shipped to their address. Amazon has an inbuilt currency converter and I have found these rates to be cheaper compared to bank charges. Personally, I have kept some $ from my earlier trips to pay friends who prefer USD over INR.

Originally Posted by noo.b

Simplify it for him as well as you. If its an online purchase do it yourself, have it shipped to him. That way he is just required to carry it back for you. I just did this for my bike's exhaust.

Originally Posted by IamNikhil

The best way is to buy the items directly by paying via your own credit card and having them shipped to his address in the USA. The conversion charges for an international transaction are nominal, considering you are anyway ending up saving a good amount by buying the items in USA instead of India. That way, your friend only has to carry the items for you on his way here, saving other hassles.

Alternatively, if your friend has an active bank account here in India, you can transfer the respective amount in INR directly to his account.

Originally Posted by turbowhistle

I am an NRI in this case and being a sneakerhead, I get requests from many friends to get Jordans/Sneakers while coming to India. I simply ask them order them directly at home and I act as a courier only, this way I doesn't have to be involved in the financials and not to worry as well. Reduces the risk of people saying no to your requests as well and most CC these days allow international websites so not a problem as well. The money you will spent more on forex fees will still be less than what you will end up saving so not a big deal imo.

Thanks everyone for this suggestion. I was thinking of taking this approach but there is a catch now- TCS of 20% on foreign payments even when using credit cards.

https://economictimes.indiatimes.com...2.cms?from=mdr

Now I know that this can be adjusted(subject to bank filing TCS return) but not a very ideal situation for a buyer like me to be in. Again this is not to say that what you guys are suggesting is wrong but it's just that there is an additional 20% weight to be borne by a buyer, at least for a few months if not an year.

[d.w.w.]

Originally Posted by AYP

TCS of 20% on foreign payments even when using credit cards.

Not a financial expert, but found this here

International credit card (ICC) spending now comes under the liberalised remittance scheme (LRS) limit and a 20 percent tax collection at source (TCS) will also kick in from July 1 if the expenses abroad exceed Rs 7 lakh.

However, since the majority of users will not exceed the Rs 7 lakh per year threshold, a 20 percent TCS is unlikely to apply to most subscriptions, experts say.

Another thing, which Sandeep Sehgal, Partner- Tax at AKM Global, pointed out is that if payment is made by any other mode (other than debit and credit card), TCS will be applicable at 20 percent without any threshold.
Notably, the government on Friday announced that no tax will be charged on overseas spending of up to Rs 7 lakh in a year using debit or credit.

I made couple of online international purchases after July 1, but haven't got any TCS deducted. I paid in INR using the local currency converter provided by the website.

[udainxs]

Originally Posted by AYP

TCS of 20% on foreign payments

This rule has not been enforced as yet.

The earlier notification which was to be enforced from 1 July, was deferred indefinitely for credit card payments

You can use your credit card on foreign websites without any TVC withholding at this time. I made a few purchases last month, and there was no withholding of TCS