Remittances abroad under LRS by Resident Indians cut to $75,000

Business

oi-Sunil

By Sunil Fernandes

Updated: Wednesday, August 21, 2013, 15:37 [IST]

Resident Indians desiring to send money abroad under the liberalised remittance scheme (LRS) would now have to restrict their remittances to a maximum of $75,000 per financial year, as against the earlier limit of $2,00,000.

The reduced limit comes as a result of the RBI measures to reduce outflows to prevent a slide of the rupee, and rationalise foreign exchange outflows by Resident Indians

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, not be allowed.

The RBI has also reduced the limit for Overseas Direct Investment (ODI) under automatic route for all fresh ODI transactions, from 400% of the net worth of an Indian Party to 100% of its net worth. This reduced limit would also apply to remittances made under the ODI scheme by Indian Companies for setting up unincorporated entities outside India in the energy and natural resources sectors.

This reduction in limit, however, would not apply to ODI by Navratna PSUs, ONGC Videsh Limited and Oil India in overseas unincorporated entities and incorporated entities, in the oil sector.

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