Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Master Direction - Liberalised Remittance Scheme (LRS)(Updated as on February 11 2016)

FEMA - 7/2015-16 - Dated:- 1-1-2016 - RBI/FED/2015-16/3 FED Master Direction No. 7/2015-16 January 1, 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 perm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed. 3. 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 01, 2016) 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed Remittance Scheme (LRS) A. Liberalised Remittance Scheme (LRS) of USD 2,50,000 for resident individuals 1. 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. 2. The LRS limit has been revised in stages consistent with pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mittances 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/purchase of property, if they are not the co-owners/co-partners of the overseas bank account/ investment/property. Further, a resident cannot gift to another resident, in foreign currency, for the credit of the l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

both listed and unlisted overseas company or debt instruments; acquisition of ESOPs (the Scheme is in addition to acquisition of ESOPs linked to ADR / GDR and acquisition of qualification shares); 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. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dividuals under Para 1 of Schedule III to Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015 dated May 26, 2015. Release of foreign exchange exceeding USD 2,50,000, requires prior permission from the Reserve Bank of India. a. Private visits For private visits abroad, other than to Nepal and Bhutan, any resident individual can obtain foreign exchange up to an aggregate amount of USD 2,50,000, from an Authorised Dealer or FFMC, in any one financial year, irrespective .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. However, if an employee is being deputed by an entity for any of the above and the expenses are borne by the latter, such expenses shall be treated as residual current account transact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

person who has fallen sick after proceeding abroad may also be released foreign exchange by an Authorised Dealer (without seeking prior approval of the Reserve Bank of India) for medical treatment outside India. In addition to the above, an amount up to USD 250,000 per financial year is allowed to a person for accompanying as attendant to a patient going abroad for medical treatment/check-up. h. Facilities available to students for pursuing their studies abroad. AD Category I banks and AD Categ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er applicable laws such as the extant Foreign Trade Policy of the Government of India. 9. The Scheme can be used for outward remittance in the form of a DD either in the resident individual s own name or in the name of beneficiary with whom he intends putting through the permissible transactions at the time of private visit abroad, against self-declaration of the remitter in the format prescribed. 10. Individuals can also open, maintain and hold foreign currency accounts with a bank outside Indi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icted under Schedule II of Foreign Exchange Management (Current Account Transaction) Rules, 2000, dated May 3, 2000, as amended from time to time. 13. The Scheme is not available for capital account remittances to countries identified by Financial Action Task Force (FATF) as non-co-operative countries and territories as available on FATF website www.fatf-gafi.org or as notified by the Reserve Bank. Remittances directly or indirectly to those individuals and entities identified as posing signific .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d with Form A2 inorder to reduce multiplicity of forms to be filled in by the customers). 15. It is mandatory to have PAN card to make remittances under the Scheme for capital account transactions. However, PAN card need not be insisted upon for remittances made towards permissible current account transactions up to USD 25,000. 16. Investor, who has remitted funds under LRS can retain, reinvest the income earned on the investments. At present, the resident individual is not required to repatriat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Scheme Resident individual is permitted to lend to a Non-resident Indian (NRI)/ Person of Indian Origin (PIO) close relative [ relative as defined in Section 6 of the Indian Companies Act, 1956] by way of crossed cheque/ electronic transfer subject to the following conditions: i. the loan is free of interest and the minimum maturity of the loan is one year; ii. the loan amount should be within the overall limit under the Liberalised Remittance Scheme of USD 2,50,000 per financial year availa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or in association with other person for any of the activities in which investment by persons resident outside India is prohibited, namely: The business of chit fund, or Nidhi Company, or Agricultural or plantation activities or in real estate business, or construction of farm houses, or Trading in Transferable Development Rights (TDRs). Explanation: For the purpose of item (c) above, real estate business shall not include development of townships, construction of residential/ commercial premises .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shares or securities or immovable property against which such loan was granted. 18. A resident individual can make a rupee gift to a NRI/PIO who is a relative of the resident individual [ relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ications issued under Foreign Exchange Management Act, 1999. 2. The Reserve Bank will not, generally, prescribe the documents which should be verified by the Authorised Persons while releasing foreign exchange for current account transactions. In this connection, attention of authorized persons is drawn to sub-section (5) of Section 10 of the FEMA, 1999 which provides that an authorised person shall require any person desiring to transact in foreign exchange to make such a declaration and to giv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Dealers are also required to keep on record any information / documentation, on the basis of which the transaction was undertaken for verification by the Reserve Bank. In case the applicant refuses to comply with any such requirement or makes unsatisfactory compliance therewith, the Authorised Dealer shall refuse, in writing, to undertake the transaction and shall, if he has reasons to believe that any contravention / evasion is contemplated by the person, report the matter to the Reserve Bank. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts. They should also comply with the Anti-Money Laundering Rules in force while allowing the facility. 7. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittances for capital account transactions. If the applicant seeking to make the remittances 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 Authorised Dealers should obtai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Authorised Dealer may also accept the payment through credit/debit/prepaid card of the card holder. 9. The Authorised Dealer should certify that the remittance is not being made directly or indirectly by/or to ineligible entities and that the remittances are made in accordance with the instructions contained herein. 10. AD bank should not extend any kind of credit facilities to resident individuals to facilitate remittances for capital account transactions under the Scheme. 11. Authorised Dealer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version