Main Note 1. [External - Overseas Investments](External%20-%20Overseas%20Investments.md) ^f384c2 1. Dec 3, 2003 - RBI raised ceiling for miscellaneous forex remittances by residents from $ 500 to $ 5000 2. [February 4, 2004](RBI_Notification_20040204_Liberalised%20Remittance%20Scheme%20of%20USD%2025,000%20for%20Resident%20Individuals%20-%20A.P%20(DIR%20Series)%20Circular%20No.64.pdf) - This scheme, with a limit of USD 25,000, read with GoI Notification G.S.R. No.207(E) dated March 23, 2004, as a liberalization measure to facilitate **resident individuals** to remit (transfer) funds abroad for permitted current or capital account transactions or combination of both, was announced 3. So this is a note on outward remittances which is permitted under LRS 4. The Liberalised Remittance Scheme (LRS) is only for individuals, while it is open for both **permissible current and capital account** ( including acquisition of property abroad) transactions, is largely (more than 90%) in current account transactions like travel, studies etc., presumably because of the ease. So it is related to the both, capital and current account transactions. 1. Under the Foreign Exchange Management Act, 1999 (FEMA), which came into force with effect from June 1, 2000, all transactions involving foreign exchange have been classified either as capital or current account transactions. 2. All transactions undertaken by a resident that do not alter his / her assets or liabilities, including contingent liabilities, outside India are current account transactions. 5. It allows resident individuals to send money abroad without prior approval from RBI, but only for 'permissible purposes'. 6. 6. The permissible capital account transactions by an individual under LRS are [specified](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10192#:~:text=The%20permissible%20capital,20139.) in Master Direction - Liberalised Remittance Scheme (LRS) 7. They can make multiple outward remittances but with the limit. 8. [March 5, 2013](https://rbi.org.in/Scripts/NotificationUser.aspx?Id=8315) - Setting up of companies abroad by resident individuals was permitted by RBI 1. [Aug 14, 2013](RBI_Press%20Release_20130814_RBI%20announces%20measures%20to%20rationalise%20Foreign%20Exchange%20Outflows%20by%20Resident%20Indians.pdf) - RBI permitted setting up of companies abroad by resident individuals was permitted (under the ODI route) within the new reduced LRS limit. 9. I [(Padmanabhan, G, 2015)](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=956) must add the caveat that any liberalisation for individuals has to be guided and circumscribed by the spectre of ‘black money’. 10. **Timeline on LRS limit** - [Master Direction - Liberalised Remittance Scheme (LRS)](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10192#:~:text=The%20LRS%20limit%20has%20been%20revised%20in%20stages) 1. Dec 20, 2006: The limit was doubled from $25,000 to $50,000. 2. May 8, 2007: It was increased to $100,000 and then to $200,000, and resident individuals were also allowed to open foreign currency accounts with banks outside India. 3. [August 14, 2013](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8306&Mode=0) - the LRS limit was reduced to $75,000. 4. July 17, 2014 - It was raised to $125,000 from $75,000. 5. [June 1, 2015](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=9756&Mode=0) - the LRS limit was raised to the current level of USD 250,000. 6. The [list of circulars](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=10193#:~:text=3rd%20May%2C%202000.-,APPENDIX,-Sl.%20No.) has also more details on the timeline. So Limits under LRS were brought down during period where there were apprehensions of large scale transfers in the face of currency volatility. 11. [April 12, 2018](RBI_Notification_20180412_Liberalised%20Remittance%20Scheme%20(LRS)%20for%20Resident%20Individuals%20–%20daily%20reporting%20of%20transactions.pdf) - Pursuant to the announcement in the [first bi-monthly Monetary Policy Statement 2018-19](RBI_MPS_SDRP_20180405.pdf) (dated April 8, 2018), a  system for daily reporting of individual transactions under the Liberalised Remittance Scheme (LRS) by Authorised Dealer (AD) banks was put in [place](RBI_MPS_SDRP_20180606.pdf). 12. [June 19, 2018](RBI_Notification_20180619_Liberalised%20Remittance%20Scheme%20–%20Harmonisation%20of%20Data%20and%20Definitions.pdf) - It was made mandatory for the resident individual to furnish/provide his/her Permanent Account Number (PAN) to make remittance under the Scheme 1. Prior to modification it read as "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". 2. In the context of the scheme, it was decided, in consultation with Government, to align the definition of ‘relative’ with the definition given in Companies Act, 2013 instead of Companies Act, 1956. 13. Feb 1, 2023 - In Union Budget 2023-24, Govt. of India announced changes in LRS, effective July 1, 2023 1. It increased the rate of TCS from 5% to 20% for remittance under LRS as well as for purchase of overseas tour package 2. The threshold of Rs 7 lakh for triggering TCS on LRS was withdrawn. 3. These two changes were not applicable when the remittance is for education or medical purpose. 14. March, 2023 - Govt announced that credit card payments would be brought under the LRS. 15. April 6, 2023 - [FAQs](https://rbi.org.in/scripts/FAQView.aspx?Id=115) on LRS scheme was updated 16. [June 28, 2023](PIB_20230628_Important%20changes%20w.r.t%20Liberalised%20Remittance%20Scheme%20(LRS)%20and%20Tax%20Collected%20at%20Source%20(TCS).pdf) - After review of suggestions, Govt. made changes to its budget announcements 17. As the LRS Scheme has operated for some time, there may be a need to review it keeping in mind the changing requirements such as higher education for the youth, requirement of start-ups etc. 2. There might even be a case for reviewing whether the limit can remain uniform or can be linked to some economic variable for individuals. 18. [Overseas Portfolio Investment](External%20-%20Overseas%20Investments.md#^661677) - Resident individuals may make OPI within the overall limit for Liberalised Remittance Scheme (LRS) in terms of schedule III of the Overseas Investment Rules, 2022 (OI Rules, 2022). ## Statistics 1. [Oct 21, 2022](RBI_Speeches_20221021_Internationalisation%20of%20the%20Rupee%20Is%20it%20time%20to%20shift%20gears.pdf#page=5&selection=219,0,219,20) - Outflows under the Liberalised Remittance Scheme between 2012-13 and 2021-22 in speech by T Rabi Sankar, the then Deputy Governor, Reserve Bank of India ## Remittances under LRS to IFSC 1. [Feb 5, 2021](RBI_MPS_SDRP_20210205.pdf) - In the [Statement on Development and Regulatory Polices](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51078) announced as part of the [Bi-monthly Monetary Policy Statement dated February 05, 2021](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51077), it was decided to permit resident individuals to make remittances to IFSCs established in India under the Scheme. 2. [February 16, 2021](RBI_Notification_20210216_Remittances%20to%20International%20Financial%20Services%20Centres%20(IFSCs)%20in%20India%20under%20the%20Liberalised%20Remittance%20Scheme%20(LRS).pdf) - RBI permitted resident individuals to make remittances under LRS to IFSCs (which are set up in India under the Special Economic Zone Act, 2005, as amended from time to time), but only for making investments in IFSCs in securities, other than those issued by entities/companies resident (outside IFSC) in India. 3. May 23, 2022 - Remittances under LRS for payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the gazette notification no. SO 2374(E) dated May 23, 2022, issued by the Central Government. 4. [April 6, 2023](RBI_Notification_20230426_Remittances%20to%20International%20Financial%20Services%20Centres%20(IFSCs)%20under%20the%20Liberalised%20Remittance%20Scheme%20(LRS).pdf) - RBI withdrew the rule of repatriating any funds lying idle in the foreign currency accounts for a period up to 15 days from the date of its receipt is withdrawn with immediate effect 5. [June 22, 2023](RBI_Notification_20230622_Remittances%20to%20International%20Financial%20Services%20Centres%20(IFSCs)%20under%20the%20Liberalised%20Remittance%20Scheme%20(LRS).pdf) - Other than remittances for investments in securities, RBI allowed remittances by resident individuals under purpose ‘studies abroad’ as mentioned in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000 for payment of fees to foreign universities or foreign institutions in IFSCs for pursuing courses after the gazette notification no. SO 2374(E) dated May 23, 2022 issued by the Central Government. 6. [Jul 10, 2024](RBI_Notification_20240710_Remittances%20to%20International%20Financial%20Services%20Centres%20(IFSCs)%20under%20the%20Liberalised%20Remittance%20Scheme%20(LRS).pdf) - RBI also allowed remittances under LRS to IFSCs for: 1. Availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs; and 2. All current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs. 7. As on March-2026, GIFT City in Gandhinagar, Gujarat is India's first and only International Financial Services Centre (IFSC). ## Act 1. Section 5 of the Foreign Exchange Management Act, 1999 ## Rules/Regulations/Master Directions 1. Rules - FEM (Current Account Transactions) Rules, 2000 (May 3, 2000) (as amended from time to time) For release of foreign exchange to persons resident in India for various current account transactions, Authorised Dealer banks are to be guided by the Rules made by the Government of India under Section 5 of the Foreign Exchange Management Act, 1999 which are detailed in the ==FEM (Current Account Transactions) Rules, 2000 2. [Master Direction - Liberalised Remittance Scheme (LRS)](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10192) *(for permitted capital and current account transactions)* 3. [Master Direction - Other Remittance Facilities](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10193) *(current account)* 1. Miscellaneous remittance facilities for residents are allowed in terms of section 5 of the Foreign Exchange Management Act, 1999 (Act 42 of 1999), read with Government of India Notification No. G.S.R 381(E) dated May 3, 2000, as amended from time to time. 4. [Master Direction - Overseas Investment](https://rbi.org.in/scripts/NotificationUser.aspx?Id=12710) (July 24, 2024) 5. **Other Outward Remittances (not related to LRS)** 1. Remittance of Assets *(capital account)* 1. Regulations - [FEM (Remittance of Assets) Regulations, 2000](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=167) (May 3, 2000) (as amended from time to time) - It has regulations for remittance outside India of assets in India by a person, whether resident in India or no. 2. Master Direction - [Master Direction - Remittance of Assets](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10197) 3. [FAQs](https://rbi.org.in/scripts/FAQView.aspx?Id=33) on Remittance of Assets 2. [March 10, 2026](RBI_Press%20Release_20260310_RBI%20issues%20Directions%20on%20Prudential%20Norms%20on%20Declaration%20of%20Dividend%20and%20Remittance%20of%20Profit%20by%20Regulated%20Entities.pdf) - [Reserve Bank of India (Commercial Banks – Prudential Norms on Declaration of Dividends and Remittance of Profit) Directions, 2026](https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13319), ‘Remittance of profit’ means repatriation of profit by a foreign bank operating in India in branch mode to its Head Office. 1. Supersession 1. November 28, 2025 - [Reserve Bank of India (Commercial Banks – Prudential Norms on Declaration of Dividends and Remittance of Profit) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13142) *(outward)* *(withdrawn on [March 10, 2026](RBI_Notification_20260310_Reserve%20Bank%20of%20India%20(Commercial%20Banks%20–%20Prudential%20Norms%20on%20Declaration%20of%20Dividend%20and%20Remittance%20of%20Profit)%20Repeal%20Directions,%202026.pdf), with effect from FY 26-27)* 6. [Master Direction – Reporting under Foreign Exchange Management Act, 1999](https://rbi.org.in/Scripts/BS_ViewMasterDirections.aspx?id=10202) 7. [Master Direction - Deposits and Accounts](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10198#:~:text=Foreign%20Currency%20Accounts%20that%20can%20be%20held%20outside%20India) - Foreign Currency Accounts that can be held outside India by a resident of India 8. ==[More](External%20-%20Overseas%20Investments.md#Rules/Regulations/Master%20Directions)== ## FAQs 1. Liberalised Remittance Scheme ([LRS](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=115)) 2. [Miscellaneous forex facilities](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=66) 3. [Foreign Exchange (Forex) Transactions](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=146) 1. Money Changing Activities 1. January 1, 2016 - [Master Direction - Money Changing Activities](https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11518) 2. January 1, 2016 to December 8, 2017 - [Master Direction - Money Changing Activities](RBI_Master%20Directions_20160101_Master%20Direction%20-%20Money%20Changing%20Activities%20(Last%20Updated%20as%20on%20December%208,%202017).pdf) 3. FAQ - [Money Changing Activities](https://rbi.org.in/scripts/FAQView.aspx?Id=54#1) ## Data Releases 1. The Monthly bulletin by RBI titled ['RBI Bulletin'](https://rbi.org.in/scripts/BS_ViewBulletin.aspx) publishes data in the section 'Outward Remittances under the Liberalised Remittance Scheme (LRS) for Resident Individuals. 2. The annual report on 'Liberalised Remittance Scheme for Resident Individuals - Yearly' can be searched using the same keyword on the [Database on Indian Economy](https://data.rbi.org.in/DBIE/#/dbie/searchresult) website. 3. Foreign Exchange Transactions Electronic Reporting System (FETERS) Card [^3] 1. It captures cross border transactions using cards. This enables the segregation of e-commerce transactions from travel transactions [^2]. 2. FETERS Card has a lot of these interesting findings. One of them is that Indians use a lot of cash while travelling abroad, in contrast to foreigners who prefer cards 4. [DBIE](https://dbie.rbi.org.in/) ## Related Notes 1. [External - Overseas Investments](External%20-%20Overseas%20Investments.md) *(capital account transactions)* 2. [External - Current Account Transactions](External%20-%20Current%20Account%20Transactions.md) 3. [Forex Markets](Forex%20Markets.md) ## References ### [[Speeches & Media Interactions|Speeches]] 1. [^1]: Khan, H. R. (2014, May 12). *Regulating Capital Account: Some Thoughts* \[Speech\]. 9th Annual Conference of the Foreign Exchange Dealers Association of India (FEDAI). Reserve Bank of India. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=14902) 2. Michael Debabrata Patra. (June 9, 2022). Statistics and Information Management in the RBI – Where We Are; Where We Want to Be - Speech delivered by Michael Debabrata Patra, Deputy Governor, in the Annual Statistics Conference of the Department of Statistics and Information Management on June 9, 2022 at Guwahati. RBI Bulletin-July 2022. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21134) [^1]: Khan, H. R. (2014, May 12). *Regulating Capital Account: Some Thoughts* \[Speech\]. 9th Annual Conference of the Foreign Exchange Dealers Association of India (FEDAI). Reserve Bank of India. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=14902) [^2]: https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21134#C5 [^3]: Michael Debabrata Patra. (June 9, 2022). Statistics and Information Management in the RBI – Where We Are; Where We Want to Be - Speech delivered by Michael Debabrata Patra, Deputy Governor, in the Annual Statistics Conference of the Department of Statistics and Information Management on June 9, 2022 at Guwahati. RBI Bulletin-July 2022. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21134)