Every rupee that leaves India through a bank or an authorised dealer leaves with a reason attached, and the A2 form is where you state it. It looks like paperwork. It is really a declaration under FEMA, signed by you, and the one field on it that people treat casually — the purpose code — is the field that decides your tax rate, your documentation and whether the transfer clears at all.
What you are actually signing
The A2 is a declaration that the remittance you are about to make is permitted under the Foreign Exchange Management Act, that the money is yours, and that it is going where you say it is going. The authorised dealer relies on it. If the declaration is wrong, the exposure is yours, not theirs.
The fields, and what each is for
- Applicant details and PAN — the PAN is not optional. It is how TCS is credited to you and how the remittance is reconciled against your LRS limit for the year.
- Beneficiary name and address — must match the receiving bank account exactly. A middle name on the invoice and not on the account is the single most common reason a transfer bounces back a week later.
- Beneficiary bank, SWIFT/BIC, IBAN or routing number — the SWIFT code identifies the bank, the IBAN or account number identifies the account. Both are needed; one is not a substitute for the other.
- Amount and currency — the currency the beneficiary needs, not the currency you find convenient. Sending USD to a euro account invites a second conversion at the receiving bank, at their rate.
- Purpose code — see below.
- Source of funds — savings, salary, sale of property, loan. This is a genuine question, and for larger amounts you may be asked to evidence the answer.
- Declaration that the remittance is within your LRS limit for the financial year, including anything already sent through other banks.
The purpose code is the whole form
RBI purpose codes are a fixed list, and the one you pick determines three things at once: what supporting documents you must produce, what rate of TCS applies, and whether the transaction is permitted under LRS at all.
- S0305 — travel. Simple documentation, general TCS rate above the threshold.
- S0301 — education. Attracts the concessional rate, and requires the admission letter or invoice from the institution.
- S0304 — medical treatment. Concessional rate, requires the estimate from the hospital abroad.
- S1301 — maintenance of close relatives. General rate. Requires proof of relationship.
- S0011 and family — investment abroad. Permitted under LRS, general rate, and the one most likely to attract questions about source of funds.
Choosing "travel" because it is the easiest box when the money is really tuition does not simplify anything. It forfeits the concessional TCS rate, and it puts a declaration on file that does not match the invoice sitting in the same folder.
What sends an A2 back
- 1Beneficiary name not matching the account exactly — including initials, middle names and the order of names.
- 2A purpose code that contradicts the supporting document attached to it.
- 3An LRS declaration that omits a remittance made earlier in the year through another bank.
- 4A missing IBAN for a European beneficiary, or a missing routing number for a US one.
- 5An unsigned or undated declaration — genuinely common, and it costs a full day.
