A. P. (DIR Series) Circular No. 106 dated June 1, 2015

I.
Liberalised Remittance Scheme (LRS) for resident individuals- increase
in the limit from USD 125,000 to USD 250,000 and rationalisation of
current account transactions
II. Remittance facilities for persons other than individuals

Notification
No. FEMA 341/2015 has substituted provisos to the existing
sub-regulation (a) of Regulation 4 of the Foreign Exchange Management
(Permissible Capital Account Transactions) Regulations, 2000.

G. S. R. 426(E) has substituted: –
a. Rule 5 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000.
b. Schedule III of the Foreign Exchange Management (Current Account Transactions) Rules, 2000.

This circular has made the following changes: –

1. Limits & facilities under the Liberalized Remittance Scheme (LRS)

a.
A resident individual can now remit up to US $ 250,000 per financial
year (as against the present limit of US $ 125,000) for any permitted
current or capital account transaction or a combination of both (except
for making remittances for any prohibited or illegal activities such as
margin trading, lottery, etc.). If an individual has already remitted
any amount during the current financial year under the LRS, then the
amount so remitted has to be reduced from the present limit of US $
250,000 for the financial year and the individual can remit the balance
amount.

b. All facilities for remittances under the Schedule III
of the Foreign Exchange Management (Current Account Transactions)
Rules, 2000 (including drawal of foreign exchange for personal /
business visits overseas) have now been merged / subsumed within the
said limit of US $ 250,000.

c. Application-cum-declaration for
remittance / drawal of foreign exchange for personal / business visits
has to be made in the Form annexed to this circular.

d. No part
of the foreign exchange of US $ 250,000 can be used for remittance
directly or indirectly to countries notified as non-cooperative
countries and territories by the Financial Action Task Force (FATF).

2. Permissible transactions under LRS

Permissible capital account transactions by an individual under LRS are: –

i) Opening of foreign currency account abroad with a bank;

ii) Purchase of property abroad;

iii) Making investments abroad;

iv) Setting up Wholly owned subsidiaries and Joint Ventures abroad;

v)
Extending loans including loans in Indian Rupees to Non-resident
Indians (NRIs) who are relatives as defined in Companies Act, 2013.

Permissible current account transactions by an individual under LRS are: –

(i) Private visits to any country (except Nepal and Bhutan);
(ii) Gift or donation;
(iii) Going abroad for employment;
(iv) Emigration;
(v) Maintenance of close relatives abroad;
(vi)
Travel for business, or attending a conference or specialised training
or for meeting expenses for meeting medical expenses, or check-up
abroad, or for accompanying as attendant to a patient going abroad for
medical treatment / check-up;
(vii) Expenses in connection with medical treatment abroad;
(viii) Studies abroad;
(ix) Any other current account transaction.

However,
for the purposes mentioned at item numbers (iv), (vii) and (viii), the
individual can avail of exchange facility for an amount in excess of the
limit prescribed under the LRS if it is so required by the country of
emigration, medical institute offering treatment or the university,
respectively.

3. Facilities for persons other than individuals

As
per the provisions of amended Schedule III, persons other than
individuals can make remittances, within the limits and subject to
conditions laid down therein, for:
i) Donations to educational institutions;
ii) Commissions to agents abroad for sale of residential flats / commercial plots in India;
iii) Remittances for consultancy services and
iv) Remittances for reimbursement of pre-incorporation expenses.