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FAQ's on - Liberalised Remittance Scheme (Updated up to March 26 2015)

Dated:- 31-3-2015 - The Reserve Bank of India had announced a Liberalised Remittance Scheme (the Scheme) in February 2004 as a step towards further simplification and liberalization of the foreign exchange facilities available to resident individuals. As per the Scheme, resident individuals may remit up to USD 125,000 per financial year for any permitted capital and current account transactions or a combination of both. The Scheme was operationalised vide A.P. (DIR Series) Circular No. 64 dated .....

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or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme. Q.3. What are the prohibited items under the Scheme? Ans. The remittance facility under the Scheme is not available for the following: i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lot .....

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istan; vi) 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; and vii) 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. Q.4. Whether LRS facility is in addition to existing facilities detailed in Schedule III under remittances? Ans. Yes, .....

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o USD 125,000 per financial year under the Scheme. Further, a resident individual can give rupee gifts to his visiting NRI/ PIO close relatives [means relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque/ electronic transfer within the overall limit of USD 125,000 per financial year and the gifted amount should be credited to the beneficiary s NRO account. An individual resident can lend money by way of crossed cheque/ electronic transfer to a Non-resident Indian .....

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India the accrued interest/ dividend on deposits/ investments abroad, over and above the principal amount? Ans. The resident individual investors can retain and re-invest the income earned on investments made under the Scheme. The residents are not required to repatriate the funds or income generated out of investments made under the Scheme. Q.6. Are remittances under the Scheme on gross basis or net basis (net of repatriation from abroad)? Ans. Remittance under this scheme is on a gross basis. .....

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Foreign Trade Policy of the Government of India and other applicable laws. Q.9. Is the AD required to check the permissibility of remittances based on the nature of transaction or can it allow the remittance based on remitter s declaration? Ans. AD will be guided by the nature of transaction as declared by the remitter and will certify that the remittance is in conformity with the instructions issued by the Reserve Bank of India, in this regard from time to time. Q.10. Can remittance be made un .....

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Ans. The remittance under the Scheme is in addition to acquisition of qualification shares. Q.13. Can a resident individual invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc., under this scheme? Ans. A resident individual can invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc. under this Scheme. Further, the resident can invest in such securities through the bank account opened abroad for the purpose under .....

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nding outward remittances under the Scheme? Ans. It is mandatory to have PAN number to make remittances under the Scheme. Q.17. In case a resident individual requests for an outward remittance by way of issuance of a demand draft (either in his own name or in the name of the beneficiary with whom he intends to putting through the permissible transactions) at the time of his private visit abroad, whether the remitter can effect such an outward remittance against self-declaration? Ans. Such outwar .....

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mitter? Ans. The individual will have to designate a branch of an AD 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. If the applicant seeking to make the remittance is a new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance of the account. Further, the AD should obtain bank statement for the .....

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has repatriated the amount remitted during the financial year, avail of the facility once again? Ans. Once a remittance is made for an amount up to USD 125,000 during the financial year, he would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country. Q.21. Are remittances required to be made only in US Dollars? Ans. The remittances can be made in any freely convertible foreign currency equivalent to USD .....

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such overseas companies has since been dispensed with. Q.23. Can resident individuals make remittances under LRS for investments in immovable properties abroad which were acquired under instalment basis? Ans. Resident individuals are permitted to make remittances for acquiring immovable property within the annual limit of USD 125,000. Q24. Can remittances be made to acquire Joint Ventures abroad? Ans. With effect from August 05, 2013, this Scheme, can be used by Resident individuals to set up Jo .....

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