The definition of formal is a relative fluid one: there’s “business formal”, “white tie”, “black tie” etc… What qualifies as “formal” in one country or context, might not be considered formal in another. Case in point: evening wedding receptions are considered black-tie affairs in the West, but I have yet to see one Desi groom (in the West or elsewhere) don an actual tuxedo; instead they wear “business suits” to their own weddings!
If you’re going to a properly ‘formal’ function, the suggested attire will often be noted on the invitation (“casual”, “business casual”, semi-formal", etc…). If you’re still not sure what to wear, it wouldn’t hurt to contact the organizer/host of an event and politely ask what dress code (if any) should be observed; use this opportunity to ask for some suggestions about attire. Who knows: depending on the function itself, you could just get away with wearing your nicest saree!
Hope that helps.