Global & NRI Desk
Foreign remittance and FEMA compliance
Foreign exchange transactions in India are governed by the Foreign Exchange Management Act, 1999 (FEMA) and the rules and directions made under it. This page summarises the main remittance routes for residents and for NRIs.
Residents
Remittances by resident individuals: the Liberalised Remittance Scheme
Under the Liberalised Remittance Scheme (LRS), a resident individual, including a minor, may remit up to USD 250,000 per financial year (April to March) for permissible current or capital account transactions, or a combination of both. Remittances can be made in any freely convertible foreign currency.
A PAN is mandatory for LRS transactions through authorised persons, and the remitter submits a declaration in Form A2 stating the purpose. The scheme is not available to companies, partnership firms, HUFs or trusts, which have separate rules.
- Permissible purposes include private visits, gifts, studies abroad, medical treatment, maintenance of close relatives, emigration and overseas investment within the applicable rules.
- Specified items are prohibited, such as remittances for margins to overseas exchanges, lottery tickets and trading in foreign exchange abroad.
Source: RBI FAQ on the Liberalised Remittance Scheme (updated 6 April 2023) ↗
NRIs and PIOs
Remittance of assets from India
An NRI or PIO may remit up to USD 1 million per financial year from these sources. Remittance above that amount needs RBI approval. All remittances remain subject to Indian tax.
NRO balances
Balances in an NRO account may be remitted subject to a declaration given to the bank.
Sale proceeds
Sale proceeds of assets such as property or shares held in India.
Inherited assets
Assets acquired by inheritance, legacy or a deed of settlement.
Tax link
How the Income-tax forms connect
A bank allowing a remittance to a non-resident must also be satisfied that Indian tax requirements are met. For payments chargeable to tax, that is where Form 145 and, in some cases, a chartered accountant’s Form 146 come in. Individuals remitting under LRS, that is, payments that need no prior RBI approval, are exempt from Form 145. The detail is on the page Form 146 and Form 145.
Residence for FEMA differs from residence for income tax. Under FEMA a person resident in India is, broadly, one who stayed in India for more than 182 days in the preceding financial year, subject to exclusions based on employment, business or the intention to stay. Income tax status is covered under NRI tax filing in India.
Source: RBI FAQ on Remittance of Assets (2 September 2016) ↗
FAQ
Common questions
Can an NRI use the Liberalised Remittance Scheme?
No. LRS is available to resident individuals. NRIs and PIOs use the remittance of assets route for NRO balances, sale proceeds and inherited assets, and can use NRE or FCNR(B) accounts for freely repatriable funds.
Is Form 145 needed for an LRS remittance?
No. Payments by an individual that do not require prior RBI approval are exempt from Form 145 under the Income-tax Act, 2025. The bank still applies the exchange-control requirements, including PAN and Form A2.
Does the USD 250,000 limit apply to companies?
No. The scheme covers resident individuals only. Companies, firms, HUFs and trusts remit under other FEMA provisions and their own limits and approvals.
What if the remittance exceeds the stated limit?
Prior approval of the Reserve Bank of India is required for remittances above the limits, for example above USD 1 million per financial year in the case of NRI remittance of assets.
These answers are general information and not advice for any specific case. Laws, forms and limits change; please check the current official source.
Limits, purposes and conditions are revised by the Reserve Bank of India from time to time. The figures above are taken from the RBI pages cited; please check the current Master Directions before acting.
Related pages
Related pages
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