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FOREX REMITTANCE FACILITIES FOR

RESIDENT INDIVIDUALS

(Outward Remittances)

Foreign Exchange Transactions

• Current Account Transactions

• Capital Account Transactions

Current Account Transactions

• Trade : EXPORT - IMPORT

• Invisibles: Tour – Travel – Remittance

• Gift – Profit/Dividend/Interest

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• No release of foreign exchange for any

• kind of travel to Nepal and Bhutan or for any transaction with persons resident in Nepal and Bhutan.

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Foreign Exchange Management (Current Account Transactions) Rules, 2000- GOI

• Schedule I - expressly prohibited

• Schedule II - permitted by the AD banks if approval from the concerned Ministry/Dept of GoI is obtained

• Schedule III- prior approval of the RBI required for remittance exceeding the specified threshold limits.

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Schedule I• Remittance out of lottery winnings• Remittance of income from racing/riding or any other hobby etc• Remittance for purchase of lottery tickets, banned/ proscribed

magazines, football pools, sweepstakes etc • Payment of commission on exports made towards investment in

JV / WOS abroad of Indian companies. • Payment related to callback services of telephones• Remittance of dividend by any company where dividend balancing

is applicable • Remittance of interest income on funds held in Non – Resident

Special Rupee ( Account ) Scheme. • Payment of commission on exports under Rupee state credit Route,

except commission up to 10% of invoice value of exports of tea and tobacco

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Schedule III

• Transactions needing RBI approval for amounts exceeding delegated powers of ADs

• travel, employment , emigration , maintenance of close relatives

• medical expenses exceeding the estimates , higher studies exceeding the estimates,

• *commission to agents for sale of flats etc. in India• * consultancy fees , • *pre- incorporation expenses

* beyond the specified limit

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General Provisions

• FEMA Declaration • Application Form • A 2 Form• Self Declaration (5 purposes)

Self Declaration giving basic details of the transaction, purpose and details of travel including declaration stating that the total amount of foreign exchange purchased in India during the FY including this application is within the limit prescribed by RBI for the purpose (without insisting on any supporting documents Self-certification by the applicant -

• transferring of responsibility to applicant

• Documentation:

• AD is required to keep on record any information /documentation on the basis of which the transaction was undertaken for verification by RBI.

Limits for Travel and Personal Remittances- in USD

• Business Travel 25000• Private travel 10000

• Medical Treatment * 100000

• Employment / Emigration * 100000

• Education per annum * 100000

• Maintenance of Close 100000• Relatives * (*On self declaration basis)

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Remittance for maintenance of close relatives abroad

i) exceeding net salary (after deduction of taxes, contribution to PF and other deductions) of a person who is resident but not permanently resident in India and-

a) is a citizen of a foreign State other than Pakistan; or

b) is a citizen of India, who is on deputation to the office or branch or subsidiary or joint venture in India of such Foreign Company.

ii) Exceeding USD 100,000 per FY per recipient in all other cases.

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Small value remittances

• AD may release foreign exchange not exceeding USD 25,000 or its equivalent, for all permissible current account transactions on the basis of simplified Application-cum-Declaration form (Form A2) as prescribed by RBI

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Liberalised Remittance Scheme (LRS)

• Facility extended to all resident individuals • freely remit upto USD 250,000 per financial year for any permissible current or capital

account transaction or a combination of both. • GIFT/DONATION/• Acquisition/holding of immovable property or shares or debt instruments or any other

asset outside India.• Free to open, hold and maintain foreign currency accounts with a bank outside India for

remittances under the scheme without the prior approval of RBI. • Banks to market schemes after clearance from DBOD,RBI

• (A resident individual can make a rupee gift to a NRI/PIO who is a close relative of the resident individual within the overall limit of USD 250,000 per financial year as permitted under the Liberalised Remittance Facility Scheme

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LRS-Not Available For

i) Remittances specifically prohibited under Schedule-I (like purchase of lottery ticket/Sweep stakes/banned magazines) or any item restricted under Schedule-II of FEMA (current a/c transactions) Rules 2000.

ii) Remittance for margins or margin calls to overseas exchanges/overseas counter party.

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LRS-Not Available For

Remittances made directly or indirectly to Nepal, Bhutan or Mauritius or Pakistanfor making remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as ‘non-co-operative Countries or Territories, from time to time (website site www.fatf-gafi.org).

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LRS-Documentation

i) Application-cum-Declaration Form-prescribed by RBI

ii) Particulars of PAN

iii) A2 Form (up to USD 25000- simplified A2 form)

iv) Declaration stating that the total amount of Foreign Exchange purchased in India during the financial year including this application is within the limit prescribed by RBI under Liberalised Remittance Scheme.

AD can check permissibility of remittances based on the nature of transaction as declared by the remitter and has to certify that the remittance is in conformity with the RBI instructions.

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