LIBERALIZED REMITTANCE SCHEME FOR RESIDENT INDIVIDUALS - REDUCTION OF LIMIT FROM USD 2,00,000 TO USD 75,000

ISSUING AUTHORITY : RESERVE BANK OF INDIA

DATE OF ISSUE : 14/08/2013

EFFECTIVE DATE : IMMEDIATE EFFECT

CIRCULAR NO. 24

The Limit for Remittances made by Resident Individuals under the Liberalised Remittance Scheme (LRS) has been reduced from USD 2,00,000 to USD 75,000 per Financial Year. Hence, under the Scheme, Remittance up to USD 75000 per financial year shall be allowed for any current or capital account or a combination of both.

Changes and Clarifications issued in this regard are:

1. Resident Individuals have, however, now been allowed to set up Joint Venture/Wholly Owned Subsidiary outside India under the outside India for bonafide business activities within the revised LRS limit with effect from August 5, 2013 subject to terms and conditions stipulated in Notification No. FEMA 263/RB-2013 dated August 5, 2013.
2. While current restrictions on the use of LRS for prohibited transactions, such as, Margin Trading and Lottery would continue, use of LRS for acquisition of Immovable Property outside India directly or indirectly will, henceforth, be not allowed.
3. Further, the limit for Gift and Loan Amount by Resident Individuals to NRI close relatives shall be within the LRS limit of USD 75,000.

All other terms and conditions issued in this regard shall remain unchanged.

For detailed Circular, follow the below Link:
A. P. (DIR Series) Circular No.24