Authorised Dealers may freely allow remittances by resident individuals up to USD 2,50,000 per Financial Year (April – March) for any permitted current or capital account transaction or a combination of both.
The Scheme is available to all resident individuals including minors. In case of remitter being a minor, the Form A2 must be countersigned by the minor’s natural guardian.
It is not available to corporates, partnership firms, HUF, Trusts, etc.
Revision in limit so far
The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions. During the period from February 4, 2004 till date, the LRS limit has been revised as under:
|Date||Feb 4, 2004||Dec 20, 2006||May 8, 2007||Sep 26, 2007||Aug 14, 2013||Jun 3, 2014||May 26, 2015|
|LRS limit (USD)||25,000||50,000||1,00,000||2,00,000||75,000||1,25,000||2,50,000|
The permissible capital account transactions
- Opening of foreign currency account abroad with a bank.
- Purchase of property abroad.
- Making investments abroad.
- Setting up Wholly Owned Subsidiaries and Joint Ventures outside India for bonafide businesses.
- Extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 20136.
The permissible current account transactions
An aggregate amount of USD 2,50,000 for private visits abroad, other than to Nepal and Bhutan irrespective of the number of visits undertaken during the year.
USD 2,50,000 in one FY as a gift to a person residing outside India or as donation to an organization outside India.
Going abroad on employment
USD 2,50,000 per FY.
A person wanting to emigrate can draw foreign exchange from AD Category I bank and AD Category II up to the amount prescribed by the country of emigration or USD 250,000.
Remittance of any amount of foreign exchange outside India in excess of this limit may be allowed only towards meeting incidental expenses in the country of immigration.
Maintenance of close relatives abroad
A resident individual can remit up-to USD 2,50,000 per FY towards maintenance of close relatives.
Note: Relatives as defined in Section 2(77) of the Companies Act, 2013 abroad.
Visits by individuals in connection with attending an international conference, seminar, specialised training, apprentice training, etc., are treated as business visits. For business trips to foreign countries, resident individuals can avail of foreign exchange up to USD 250,000 in a FY irrespective of the number of visits undertaken during the year.
However, if an employee is being deputed by an entity for any of the above purposes and the expenses are borne by the latter, such expenses shall be treated as residual current account transactions outside LRS and may be permitted by the AD without any limit, subject to verifying the bonafides of the transaction.
Medical treatment abroad
USD 2,50,000 or its equivalent per FY without insisting on any estimate from a hospital/doctor.
Amount exceeding the above limit, Authorised Dealers may release foreign exchange under general permission based on the estimate from the doctor in India or hospital/ doctor abroad.
A person who has fallen sick after proceeding abroad may also be released foreign exchange by an Authorised Dealer (without seeking prior approval of the Reserve Bank of India) for medical treatment outside India.
In addition to the above, an amount up to USD 250,000 per financial year is allowed to a person for accompanying as attendant to a patient going abroad for medical treatment/check-up.
Facilities available to students for pursuing their studies abroad
USD 2,50,000 or its equivalent to resident individuals for studies abroad without insisting on any estimate from the foreign University.
Remittance exceeding USD 2,50,000 without seeking approval from the RBI, based on the estimate received from the institution abroad.
Foreign currency accounts with a bank outside India
Individuals can also open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the Scheme without prior approval of the Reserve Bank.
Purchasing objects of art
Remittances under the Scheme can be used for purchasing objects of art subject to the provisions of other applicable laws such as the extant Foreign Trade Policy of the Government of India.
Banks should not extend any kind of credit facilities to resident individuals to facilitate capital account remittances under the Scheme.
Purposes specifically prohibited under Schedule-I or restricted under Schedule-II of Foreign Exchange Management (Current Account Transaction) Rules, 2000.
Capital account remittances to countries identified by Financial Action Task Force (FATF) as non-co-operative countries and territories as available on FATF website or as notified by the Reserve Bank.
Documentation by the remitter
Form A2 to be submitted.
PAN is mandatory.