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Resident individuals can remit funds abroad up to two hundred fifty thousand United States Dollars per financial year for permitted transactions under the Liberalised Remittance Scheme. Authorised Dealers process these remittances through designated bank branches after verifying customer details and obtaining necessary declarations and Permanent Account Numbers. The scheme does not apply to corporates, partnership firms, Hindu Undivided Families, or trusts. Remittances cannot target non-cooperative countries identified by the Financial Action Task Force or prohibited entities. Unspent foreign exchange must be repatriated within one hundred eighty days unless reinvested under specific rules.
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RBI/FED/2017-18/3
FED Master Direction No. 7/2015-16
January 1, 2016
( Updated as on September 06, 2024 ) ( Updated as on December 22, 2023 ) ( Updated as on August 24, 2022 ) ( Updated as on August 23, 2022 ) ( Updated as on June 20, 2018 ) ( Updated as on August 02, 2017 ) ( Updated as on April 12, 2017 ) (Updated as on February 11, 2016 * )
To,
All Authorised Persons in Foreign Exchange
Madam / Sir,
Master Direction - Liberalised Remittance Scheme (LRS)
The captioned Scheme was introduced on February 4, 2004, vide A.P. (DIR Series) Circular No. 64 dated February 4, 2004 read with GoI Notification G.S.R. No.207(E) dated March 23, 2004, as a liberalization measure to facilitate resident individuals to remit funds abroad for permitted current or capital account transactions or combination of both. These Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through amendment notifications.
Within the contours of the Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 11 of the Foreign Exchange Management Act (FEMA), 1999. These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed.
This Master Direction consolidates the existing instructions on the "Liberalised Remittance Scheme" at one place. Reporting instructions can be found in Master Direction on Reporting (Master Direction No. 18 dated January 1, 2016)
It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be amended suitably simultaneously.
Yours faithfully,
(N. Senthil Kumar)
General Manager
INDEX
| Sr. No. | Contents |
|---|---|
| 1. | Liberalised Remittance Scheme (LRS) of USD 2,50,000 for resident individuals |
| 2. | Operational instructions to Authorised Persons |
| 3. | 1 Annex – Form A2 |
| 4. | 2 Omitted |
Master Direction - Liberalised Remittance Scheme (LRS)
A. Liberalised Remittance Scheme (LRS) of USD 2,50,000 for resident individuals
Under the Liberalised Remittance Scheme, 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 not available to corporates, partnership firms, HUF, Trusts, etc.
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:
(Amount in USD 3 )
| 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 Scheme is available to all resident individuals including minors. In case of remitter being a minor, 4 the Form A2 must be countersigned by the minor’s natural guardian.
Remittances under the Scheme can be consolidated in respect of family members subject to individual family members complying with its terms and conditions. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment 5 , if they are not the co-owners/co-partners of the overseas bank account/ investment 6 . 7 Remittances for purchase of property shall be in accordance with the provisions under paragraph 6(ii).
Further, a resident cannot gift to another resident, in foreign currency, for the credit of the latter’s foreign currency account held abroad under LRS.
All other transactions which are otherwise not permissible under FEMA and those in the nature of remittance for margins or margin calls to overseas exchanges/ overseas counterparty are not allowed under the Scheme.
The permissible capital account transactions by an individual under LRS are:
Further, all tour related expenses including cost of rail/road/water transportation; cost of Euro Rail; passes/tickets, etc. outside India; and overseas hotel/lodging expenses shall be subsumed under the LRS limit. The tour operator can collect this amount either in Indian rupees or in foreign currency from the resident traveller.
(b) Gift/donation Any resident individual may remit up-to USD 2,50,000 in one FY as gift to a person residing outside India or as donation to an organization outside India.
(c) Going abroad on employment A person going abroad for employment can draw foreign exchange up to USD 2,50,000 per FY from any Authorised Dealer in India.
(d) Emigration 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 and not for earning points or credits to become eligible for immigration by way of overseas investments in government bonds; land; commercial enterprise; etc.
(e) Maintenance of relatives abroad A resident individual can remit up-to USD 2,50,000 per FY towards maintenance of relatives [‘relative’ as defined in Section 2(77) of the Companies Act, 2013 10 ] abroad.
(f) Business trip Visits by individuals in connection with attending of 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 2,50,000 in a FY irrespective of the number of visits undertaken during the year.
