| Date: |
04-09-2013
|
| Notification No: |
RBI/2013-14/222 A.P. (DIR Series) Circular No.32
|
| Issuing Authority: |
RBI
|
| Type: |
A.P.D.(Series) Circulars
|
| File No: |
RBI/2013-14/222 |
| Subject: |
Liberalized Remittance Scheme – Clarifications
|
RBI/2013-14/222
A.P. (DIR Series) Circular No.32
September 04, 2013
To
All Authorised Dealer Category-I Banks
Madam / Sir,
Liberalized Remittance Scheme – Clarifications
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited
to the
A.P. (DIR Series) Circular No. 24 dated August 14, 2013. In this
connection, Reserve Bank has been receiving queries from the various
stakeholders and Authorised Dealer banks. All such queries have been collated
and are given at the annex together with the answers/ clarifications.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(C. D. Srinivasan)
Chief General Manager
[Annex to A.P.(DIR Series)
Circular No.32 of 04.09.2013]
Clarifications on Liberalized Remittance Scheme (LRS)
| S. No. |
Query |
Answer / Clarification |
| 1 |
Whether LRS can be used for acquisition of both unlisted and listed shares of an
overseas company? |
In terms of the extant FEMA provisions LRS can be used to acquire both listed
and unlisted shares of an overseas company. The Master Circular dated July 1,
2013 has been suitably modified. |
| 2 |
Can a resident individual use the other limits under Schedule III to FEM CAT
Rules 2000, as amended from time to time, such as remittances for education,
health / medical expenses over and above the LRS limit? |
As per the current guidelines of LRS, only gift and donation (from the list of
items under Schedule III to FEM CAT Rules, 2000), by a resident individual have
been subsumed under the LRS limit. For all other purposes such as educational
and medical expenses the limits of LRS and Schedule III to FEM CAT Rules 2000
are separate, distinct, mutually exclusive and over and above each other
respectively.
In this context, it may be noted that under the extant guidelines under FEMA the
following remittances can be made over and above the annual limit of USD 75000
permissible under LRS:
- A resident individual can make remittances for meeting expenses for medical
treatment abroad up to the estimate from a doctor in India or hospital/ doctor
abroad under general permission (without any RBI approval – Para 9 of Schedule
III to FEM CAT Rules, 2000, as amended from time to time).
- A resident individual can make remittances up to USD 25,000 for maintenance
expenses of a patient going abroad for medical treatment or check-up abroad or
for accompanying as attendant to a patient going abroad for medical treatment/
check-up (without any RBI approval – Para 8 of Schedule III to FEM CAT Rules,
2000, as amended from time to time).
- A resident individual can make remittances for studies up to the estimates from
the institutions abroad or USD 100,000, whichever is higher (without any RBI
approval – Para 10 of Schedule III to FEM CAT Rules, 2000, as amended from time
to time). This is over and above the remittance limit of USD 75,000 which can be
made under the LRS route for the same.
- A resident individual can also make all other remittances (other than donation
and gifts) as stipulated under Schedules III to FEM CAT Rules, 2000, as amended
from time to time.
- A resident individual can also carry out other permissible current account
transactions (transactions which are not explicitly prohibited under Schedule I,
or restricted under Schedules II and III, to FEM CAT Rules, 2000, as amended
from time to time) without any limits through an AD Bank in India subject to the
AD bank verifying the bonafides of the transaction (para 6 to Annex 1 of ADMA
Circular No.11 dated May 16, 2000).
Therefore notwithstanding the revised guidelines and reduction in the LRS limit
these guidelines do not affect genuine transactions. |
| 3 |
As per para 2 (iii) of
AP (Dir Series) Circular No.24 dated August 14, 2013
Notification FEMA 263/2013-RB is dated March 5, 2013 but the said Notification
as available on the website is dated March 5, 2013? What is the correct date of
this Notification? |
The said Notification is dated March 5, 2013 but gazetted on August 5, 2013. As
per Regulation 1(ii) of this Notification, this Notification shall come into
force from the date of publication in Official Gazette, accordingly the
effective date of this notification is August 5, 2013 (while the date of the
notification is March 5, 2013). |
| 4 |
Can resident individuals make remittances under LRS for investments in immovable
properties abroad which were acquired under instalment basis? |
Resident individuals are permitted to make remittances for acquiring immovable
property within the annual limit of USD 75000 for already contracted cases, i.e.
only for those contracts which were entered into on or before the date of the
circular, i.e., August 14, 2013, subject to satisfaction of the genuineness of
the transactions by the AD bank. Such cases should be immediately reported post
facto to the Reserve Bank of India by the A D banks. |
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