With the advent of Globalisation, more and more Indians have now started settling abroad. They are not only settling abroad but have also started sending money from India to US, Canada, Australia, Europe, Dubai and other Countries. As a step towards further simplification and liberalisation of the Foreign Exchange facilities available to resident Indians, RBI had announced the Liberalised Remittance Scheme in February 2004.
The facility of Liberalised Economic Scheme is extended to all Resident Individuals under which they may freely remit up to USD 250000 per financial year for any permissible current or capital account transaction or a combination of both. There is no restriction on the frequency or the no. of times money is sent abroad from India and only the Total Limit is fixed at $250000.
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The Remittance can be made in any currency but shall not be more than the equivalent of $2,50,000. Remittance under this Scheme can be made to any country except Bhutan, Nepal, Mauritius or Pakistan.
How to send Money outside India
The facility extended under this Scheme is in addition to the facility extended for private travel, business travel, studies, medical treatment etc as described in Schedule III of Foreign Exchange Management Rules 2000
To avail the benefit of Liberalised Remittance Scheme, the Resident Indian will have to designate a branch of an Authorised Dealer through which all the remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance.
He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme.
Examples of Transactions permitted under this Scheme
- Acquire Shares
- Acquire Debentures
- Open Bank Accounts
The above transactions are a few illustrative examples of the transactions permitted. Almost all transactions are permitted except those stated below: –
- Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;
- Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;
- Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;
- Remittance for trading in foreign exchange abroad;
- Remittance by a resident individual for setting up a company abroad;
- Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan;
- Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time;
- Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
- Remittance for acquisition of Immovable property (RBI Circular No 24 dated 14th Aug 2013)