Government has recently modified the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and the Liberalized Remittance Scheme (LRS) for resident individuals for further liberalizing the existing guidelines. Accordingly, all resident individuals, including minors, are allowed to freely remit upto USD 2,50,000 (USD 1,25,000 earlier) per financial year for any permissible current or capital account transaction or a combination of both. These include the purposes of education or for maintenance of close relatives. Further, authorized dealers may allow remittances exceeding USD 250,000 based on the estimate received from the educational institution abroad or a hospital abroad. For small value remittances (upto USD 25,000), the documentation requirement is simpler and even PAN card is not insisted upon.

 Currently, as per the provisions of the Income-tax Act, 1961 read with Income-tax Rules, 1962, no certificate from a Chartered Accountant is required to be obtained for certain remittances including sending money to students i.e., for remittances made under RBI’s purpose Code “S0305-Travel for education (including fees, hostel expenses etc.)” and remittance towards personal gifts and donations i.e., for RBI’s Purpose Code “S1302”. The complete list of payments in which no certificate from a Chartered Accountant is required to be obtained is given in explanation (2) to Rule 37BB of the Income-tax Rules, 1962.

 This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha today.

Liberalized Remittance Scheme expanded, allowing higher resident remittances for education and medical purposes with simplified documentation. The Liberalized Remittance Scheme now allows resident individuals, including minors, to remit up to USD 250,000 per financial year for permissible current or capital account transactions, including education and maintenance of relatives; authorized dealers may permit higher amounts for education or medical treatment backed by an institutional estimate; small remittances feature simplified documentation and PAN is not insisted upon. Under Income-tax Rules, no CA certificate is required for specified remittances listed in explanation (2) to Rule 37BB, including education travel and personal gifts and donations.