Form A2 for Foreign Remittance (2026): Which Form You Actually Need, Purpose Codes & TCS

Form A2 is the application-cum-declaration you sign before your bank sells you foreign exchange and wires it abroad. It tells the Authorised Dealer who is paying, who is being paid, how much, and the part that decides everything downstream - why. It is issued under the Foreign Exchange Management Act, 1999, and since 3 July 2024 your bank must obtain it for every outward remittance, whether you are sending ₹40,000 or ₹4 crore.

Here is the problem with almost every guide ranking for this term. Two of them are wrong in places you can check. They tell importers to file Form A1 - a form the RBI discontinued in February 2015. And they quote TCS rates that were superseded on 1 April 2026, in one case printing three different education rates on the same page. If you are a business paying an overseas supplier, the published advice on this topic is not just thin. It is stale.

Start here: what you file depends on who you are

If you are a resident individual sending money for education, medical treatment, family maintenance, travel or investment: you file Form A2, under the Liberalised Remittance Scheme. Your limit is USD 2,50,000 per financial year. TCS applies above ₹10 lakh.

If you are a business paying for imported goods: you do not file Form A1. It no longer exists as a mandatory form. Your bank collects the same information through its own import remittance application or online trade portal, and reports the payment into IDPMS against your Bill of Entry. TCS does not apply to you - more on why below, because most guides get this wrong and it costs businesses real money in unnecessary arguments with their branch.

If you are a business paying for services, software, royalty or professional fees: Form A2, with a services purpose code, plus Form 15CA and usually 15CB. This is the category that gets misfiled most often, because it looks like a trade payment but is treated as a current account remittance.

You almost certainly do not need to download a blank form. Every major bank now generates Form A2 inside its own remittance workflow, and the RBI permits both physical and digital submission. If someone hands you a PDF to print, ask why.

What changed, and when

Three dates matter.

1. Form A1 was discontinued on 12 February 2015. A.P. (DIR Series) Circular No. 76 - titled Form A1 – Payments for Imports - Discontinuance thereof - dispensed with the requirement to submit Form A-1 for import payments into India. The circular is explicit that AD banks must still obtain all the requisite details and satisfy themselves about the bona fides of the transaction. That is the sentence that matters: the form went away, the data did not. Which is why your bank still asks for the invoice, the IEC, the Bill of Entry number and the purpose code, and why importers keep being told they are "filling A1" when they are filling the bank's own application.

2. The USD 25,000 exemption ended on 3 July 2024. Under A.P. (DIR Series) Circular No. 13 (RBI/2024-25/47), banks may no longer release foreign exchange on a simple request letter for current account transactions up to USD 25,000. Form A2 is now required for all cross-border remittances irrespective of value, and the earlier rule mandating online-only submission has been relaxed, physical or digital, both are acceptable.

3. TCS rates changed on 1 April 2026. The Finance Act 2026 cut LRS education and medical TCS from 5% to 2%, made overseas tour packages a flat 2% with no threshold, and the provision itself was renumbered from Section 206C(1G) of the Income-tax Act, 1961 to Section 394(1) of the Income-tax Act, 2025. If a guide still says 5%, or still quotes 0.5% on education loans, it has not been updated in over a year.

Which form, which route: the table nobody publishes

The single most useful thing on this page: TCS under Section 394(1) applies to remittances by resident individuals under LRS. A private limited company paying its Chinese supplier is not remitting under LRS. It has no LRS limit and no TCS liability.

Filling Form A2: the fields that actually fail

Skip the fields that never cause a problem. These are the five that do.

Remitter name. Must match the bank account and the PAN exactly. Not "close enough." A missing middle name is a mismatch. For companies, the name must match the account title, not the trade name on your letterhead.

Beneficiary name and account. Must match what the beneficiary's own bank has on file. This is now stricter than it used to be. Since the ISO 20022 migration completed in November 2025, unstructured free-text addresses are rejected outright - beneficiary and originator addresses must be submitted in structured format. If your remittance bounces with a vague validation error and a correct routing code, incomplete address data is the first place to look.

SWIFT/BIC code. Eight characters for the head office, eleven for a specific branch. Use the branch code if the beneficiary has one. Codes change when banks merge, and a stale code looks identical to a correct one until the money doesn't arrive, verify it against the beneficiary's own bank rather than an old invoice. Our guide to reading a SWIFT code breaks down the format, and the SWIFT Code Finder will pull the exact code by country, city and bank.

Purpose code. Covered in its own section below, because it is the field that costs money.

Source of funds and supporting document. The document must agree with the purpose code. A commercial invoice against a "family maintenance" code is a rejection. So is a proforma invoice where the bank expected a final one.

Your bank's online route

Nobody fills this on paper any more unless the branch insists. The form is generated inside the portal:

• HDFC Bank - RemitNow, under Accounts → Transact → Remit Money. Form A2 is generated from your entries; you authorise with OTP.
• ICICI Bank - Money2World. Outward remittance is a standalone flow with the declaration built in.
• Axis Bank - Internet Banking → Forex → Outward Remittance, or the Axis Remit portal.
• Kotak Mahindra - Net banking → Forex Services → Send Money Abroad.
• State Bank of India - through the branch or Global Trade Services for trade remittances; SBI's retail online outward remittance is more limited than its private-sector peers.

Two operator notes. First, cut-off time is real. Most banks stop accepting same-day outward remittances between 2:00 and 3:00 PM. A form submitted at 3:30 PM is a next-working-day remittance, and if your supplier has a payment deadline, that is a day you did not budget for. Second, you cannot correct a submitted Form A2. There is no amendment. You withdraw and file fresh, which means re-doing the FX booking at whatever the rate is by then.

The purpose code is the field that costs you money

Every guide calls the purpose code critical. None of them help you find yours.

The RBI's purpose code list runs from S0001 to S1500-odd, grouped by category, imports under S0101 to S0108, transport under S0401 onwards, travel under S0301, education under S0305, family maintenance under S1301. The codes are not intuitive. S0101 is a general import payment. S0104 covers imports under intermediary trade. If you are paying a foreign consultant, you are somewhere in the S0800 professional services block, not in imports at all.

Getting it wrong does three things. It puts your transaction in the wrong bucket in the RBI's balance-of-payments reporting. It can trigger a TCS deduction you did not owe, or miss one you did. And for importers, a mismatched code breaks the IDPMS reconciliation, which surfaces months later as an open entry your bank chases you about.

TCS on foreign remittance: the FY 2026-27 position

Only if you are a resident individual remitting under LRS. Businesses paying for imports or services: this section does not apply to you.

Three things people get wrong.

The threshold is aggregate, not per transaction and not per bank. Three remittances of ₹4 lakh through three different banks in the same financial year total ₹12 lakh, and TCS applies on ₹2 lakh. Banks track your cumulative LRS drawals against your PAN, but keep your own running total, the surprise arrives on the transaction that tips you over.

Worked example, because the arithmetic gets published wrong. Remit ₹20 lakh for self-funded education in FY 2026-27. TCS is 2% of ₹10 lakh, the excess above the threshold - which is ₹20,000. Not ₹2,000. For a ₹20 lakh investment remittance at 20%, it is ₹2,00,000. Keep the TCS amount in the account on top of the remittance, or the debit fails.

TCS is not a cost. It is an advance tax credited against your PAN, visible in your AIS, adjusted or refunded when you file. The certificate is now Form 133, which replaced Form 27D under the 2026 rules.

What actually gets rejected

The pattern is worth naming. Almost nothing gets rejected because of the form. It gets rejected because two documents disagree with each other. Before you submit, put the invoice, the beneficiary bank details and the purpose code side by side and check they tell the same story. That five-minute check is the whole job.

After the money leaves: closing the loop

For importers, the remittance is not the end. Your AD bank reports the outward payment into IDPMS, and it stays open until you supply evidence of import, normally the Bill of Entry. An open IDPMS entry is a compliance item that follows you: it blocks future remittances at some banks and it is the thing your auditor finds in month nine. Track the Bill of Entry through to Out of Charge, then get the evidence to your bank while the shipment is still fresh in everyone's memory. On the export side, the mirror problem is EDPMS entries and shipping bill closure.

There is also a cost nobody audits. The exchange rate your bank applies on an outward remittance is rarely the mid-market rate, and each correspondent in the chain can take a cut on the way. On a single ₹50 lakh supplier payment, a 2% spread is ₹1 lakh that never appears as a line item on any statement. Our breakdown of forex markup fees shows where it hides.

That spread, and the documentation chase that follows it, is what EximPe was built for. EximPe is an RBI-licensed Payment Aggregator - Cross Border (PA-CB), the category the RBI created on 31 October 2023 to directly regulate non-banks facilitating import and export payments. Import payments route through an Import Collection Account held with an AD Category-I bank, which means the FEMA reporting - IDPMS and EDPMS entries included - is handled inside the transaction rather than chased afterwards, and you see the FX rate before you accept it. One honest limitation to know upfront: the PA-CB framework caps transactions at ₹25,00,000 per unit of goods or services. Above that, you are back to your AD bank's trade desk.

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