Liberalised remittance scheme
- Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April -March) for any permissible current or capital account transaction or a combination of both.
- Further, resident individuals can avail of foreign exchange facility for the purposes mentioned below:
- Private visits to any country (except Nepal and Bhutan)
- Education abroad
- Gift or donation
- Going abroad for employment
- Emigration
- Maintenance of close relatives abroad
- Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/check-up
- Expenses in connection with medical treatment abroad
- Any other current account transaction which is not covered under the definition of current account in FEMA 1999
- Remittances under the Scheme can be consolidated in respect of immediate family members subject to individual family members complyiand conditions of LRS. However, clubbing is not permitted by other family members for capital account transactions such as opening a bankaccount/investment/purchase of property, if they are not the co-owners/co-partners of the overseas bank account/ investment/property.
- The Scheme is not available to corporates, partnership firms, HUF, Trusts etc.
- The permissible capital account transactions by an individual under LRS are:
- Opening of foreign currency account abroad with a bank
- Purchase of property abroad;
- Making investments abroad
- Acquisition and holding shares of both listed and unlisted overseas company or debt instruments;
- Acquisition of qualification shares of an overseas company for holding the post of Director
- Investment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes;
- Setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013) outside India for bonafide business subject to the terms & conditions stipulated in Notification No FEMA. 263/ RB-2013 dated March 5, 2013
- Extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 2013
- However, the rules restrict investments in derivative products like futures and options irrespective of whether the underlying is stocks, foreign exchange or commodities.
- There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.