Mar 15, 2023
Rajeev Kumar
If you are investing abroad or using forex for travel, education or medical, there is a new rule for dollar remittances that you must know. Read on to find in a few seconds
Indian resident individuals are allowed to remit upto USD 250,000 per Financial Year under the Liberalized Remittance Scheme (LRS) for specified purposes.
However, if you have made a dollar remittance under LRS, you much invest or spend it within 180 days.
If you have any unused foreign exchange stashed abroad, you must return it within within 180 days.
The new rule has been effective since RBI updated its Master Direction on LRS in August 2022 to align with relevant FEMA regulations.
The revised rule applies to both investors, who remit dollars abroad for investment purposes, and individuals using forex abroad for medical, education or travel needs.
Investor, who has remitted funds under LRS can retain, reinvest the income earned on the investments. The received/realised/unspent/unused foreign exchange, unless reinvested, shall be repatriated and surrendered to an authorised person within a period of 180 days
Experts say that the resident individual is mandatorily required to either invest the funds in securities outside India or spend the same for any purpose specifically permitted
The first period of such 180 days since the new provision expired in February 2023.
However, there is an ambiguity faced by resident individuals with respect to applicability of said time limit for various remittances sent under LRS.
Experts say that resident individuals must approach their Authorised Dealer Banks and confirm if the remittances sent under LRS, which are not invested, are required to be repatriated back to India within 180 days.