Remittance of money abroad under LRS and Form 15CA and 15CB
Form 15CA and 15CB
Every Year, millions of international
remittances are done by the Indians all over the world.
In this write up, we would be discussing
about remittance of money under Liberalized remittance Scheme (LRS) and filing
of form 15CA and
15CB.
Under the LRS, all the individuals who are
residents including the minors are allowed to make remittance outside India
freely upto USD 2.5 lac in a financial year subject to fulfillment of certain
prescribed conditions and filing of necessary forms with the AD bankers
including filing of Form 15CA and 15CB.
This LRS scheme was originally introduced in
the year 2004 and initial limit of remittance was only USD 25,000 which has
kept on increasing year after year and now, the limit per financial year is USD
2.5 lac.
This scheme is not available for remittance
made by Companies, Partnership firms, HUF, Trusts etc. Even minor can make remittance
under this scheme, however, in such cases, declaration forms need to be
countersigned by his/her parents.
Types of remittances which can be made under LRS and for
which foreign exchange facility can be availed
For the following purposes, remittances can be made
under LRS and foreign exchange facility can be availed namely,
i.
Personal
visit to any country except Bhutan and Nepal
ii.
Making
a donation or gift to person broad. In case of gift, no form
15CA and 15CB is required.
iii.
Making
a visit to foreign country for employment purpose.
iv.
For
the purpose of Emigration
v.
For
making remittances for the maintenance of relatives who are close relatives
abroad
vi.
For
making business, or for attending a conference or for the purpose of specialized
training or for making remittances for medical expenses abroad, or going as an attendant
to a patient going abroad for medical treatment.
vii.
For
purpose of doing studies in a foreign country
viii.
Any
other current account transaction not covered under the definition of current
account in FEMA 1999.
a) Remittances which are
prohibited under Schedule-I like purchase of lottery tickets/sweep stakes, purchase
of proscribed magazines, etc. or any item restricted under Schedule II of
Foreign Exchange Management (Current Account Transactions) Rules, 2000.
b) Remittance for margins or
margin calls to overseas exchanges / overseas counterparty.
c) For the purchase of FCCBs
issued by Indian companies in the overseas secondary market.
d) Remittance for foreign
exchange trading abroad.
e) Remittance of Capital
account items, to FATF listed countries.
f) Remittances to entities or individuals
involved in any act of terrorism.
Some requirements to be
fulfilled for availing LRS
1) Resident individuals must
have PAN which needs to be submitted to the banker for all the transactions
under LRS.
2) There is no restrictions on
the frequency of the transactions, however, total limit in a year shall not
exceed USD 2,50,000.
3) The remitter should
maintain bank account with designated AD banker for atleast 1 year prior to
remittance. In case of bank account which is new, proper due diligence must be
done by the banker and all the necessary KYC documents and Income Tax Return in India copies shall be taken.
4) Remitter shall furnish form
A2 regarding the purpose of the remittance and give a declaration that the
funds will not be uses for any prohibited purpose.
Thus, the RBI has through LRS tried to simplify the
entire remittance process for an individual. Now, he don’t have to make
substantial compliance at time of remittance abroad and can easily transfer
upto USD 2,50,000 every financial year subject to filing of form 15CA and 15CB and
submission of some forms and documents.
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