Foreign Exchange Remittance Facilities for Individuals

A complete, exam-ready guide to how individuals send and receive foreign exchange under FEMA — the Liberalised Remittance Scheme (LRS), Current Account Transaction Rules, purpose-wise limits, currency-carrying & surrender rules, and inward remittance schemes — with tap-to-reveal MCQs.

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Overview LRS CAT Rules Purpose-wise Limits Carrying Currency Surrender Rules Inward Remittances NRI & TCS Quick Facts MCQs Revision

1 The Big Picture

Under FEMA, an individual can buy, carry, send and receive foreign exchange — but only within limits and for permitted purposes. Three rule-sets matter most:

Liberalised Remittance Scheme (LRS) — the single most important facility for resident individuals.
Foreign Exchange Management (Current Account Transaction) Rules, 2000 — what is prohibited / needs approval.
Surrender & possession rules — under FEMA 9(R), 2015.

Remember: remittances are released by an Authorised Dealer (AD) bank (or FFMC for travel), usually against a Form A2 declaration and PAN.

2 Liberalised Remittance Scheme (LRS)

Limit: a resident individual can remit up to USD 2,50,000 per financial year (April–March).
For whom: resident individuals only, including minors (a minor’s form is signed by the guardian).
Not for: companies, partnership firms, HUFs and trusts.
Use: permitted current and capital account transactions, or a mix of both.
One combined limit: the USD 2,50,000 covers travel, gifts, investment, etc. together (tracked at PAN level across all banks).
How drawn: as cash, traveller’s cheques, forex card or a combination; forex can be bought up to 60 days before travel.

Prohibited under LRS: lottery tickets, banned/proscribed magazines, margin/margin-calls to overseas exchanges, trading in foreign exchange abroad, and remittances to FATF non-cooperative countries or for terror-linked activity. Once the limit is used, it is not restored even if money is brought back.

3 Current Account Transaction Rules, 2000

These rules classify current-account remittances into three schedules:

Schedule	Meaning	Examples
Schedule I	Prohibited transactions	Remittance of lottery winnings; income from racing/riding/hobby; purchase of lottery tickets, banned magazines, football pools, sweepstakes
Schedule II	Need prior Central Government approval	Cultural tours; advertisement in foreign print media beyond limit; remittance of container detention charges above rates; payment of import by Govt/PSU on c.i.f. basis
Schedule III	Need RBI approval beyond limits (for individuals, now within the LRS limit)	Private/business travel, gifts, donations, studies, medical, maintenance of relatives — up to USD 2,50,000; beyond that, RBI approval

Exam point: Prohibited = Schedule I; Government approval = Schedule II; RBI approval / LRS = Schedule III.

4 Purpose-wise Remittance Limits

Most individual purposes are now covered within the LRS limit of USD 2,50,000 per FY:

Purpose	Limit
Private visit abroad (except Nepal/Bhutan)	Up to USD 2,50,000 per FY
Business trip	Up to USD 2,50,000 per FY (self-declaration)
Gift / Donation	Up to USD 2,50,000 per FY
Employment / Emigration abroad	Up to USD 2,50,000 (more if the country requires)
Medical treatment abroad	Up to USD 2,50,000 (more allowed on hospital’s estimate)
Studies abroad	As per the institution’s estimate (can exceed USD 2,50,000)
Maintenance of close relatives abroad	Up to USD 2,50,000 per FY

Note: for medical and studies, the LRS ceiling can be exceeded if supported by an estimate from the hospital or educational institution.

5 Carrying Currency for Travel

Foreign Currency

Foreign currency in cash (notes/coins): up to USD 3,000 per visit; the balance must be carried as forex card, traveller’s cheque or banker’s draft.
Exceptions: for Iraq & Libya — up to USD 5,000 in cash; for Iran, Russia & CIS countries — the full amount can be in cash.
There is no limit on holding foreign coins.

Indian Currency (₹)

A resident returning from abroad (other than Nepal/Bhutan) may bring in Indian currency up to ₹25,000.
To/from Pakistan or Bangladesh: up to ₹10,000.
For Nepal/Bhutan: only notes of denomination up to ₹100 are allowed.

6 Surrender of Unspent Forex & CDF

On return, unspent foreign exchange (notes/TCs) must be surrendered within 180 days of return.
An individual may retain up to USD 2,000 (notes/TCs) indefinitely, or credit it to an RFC(D) account.
Forex bought but not used within 60 days must be surrendered.

Currency Declaration Form (CDF)

While bringing forex into India, a CDF must be filed with Customs if the aggregate forex (notes + TCs) exceeds USD 10,000, OR the currency notes/coins alone exceed USD 5,000. There is no limit on the amount of forex that can be brought in.

7 Inward Remittance Schemes

Scheme	Purpose	Limit
Rupee Drawing Arrangement (RDA)	Inward personal remittances through exchange houses	No limit for personal remittances
Money Transfer Service Scheme (MTSS)	Quick cash transfer of personal remittances into India	USD 2,500 per transaction; max 30 per beneficiary per year

MTSS limits: it is only for personal remittances (family maintenance, gifts). It cannot be used for donations, business/commercial purposes, investment, buying property, or crediting to an NRE account.

8 NRI Remittances & TCS

Remittances by NRIs

From an NRO account: up to USD 1 million per financial year (out of balances), for permitted purposes.
From NRE / FCNR(B) accounts: fully repatriable.
Gift in Rupees by a resident to an NRI close relative is allowed up to the LRS limit and credited to the NRI’s NRO account.

TCS on LRS (Tax angle)

Tax Collected at Source (TCS) applies on LRS remittances above ₹10 lakh in a financial year: 20% for general purposes, 5% for education/medical (and 0% if education is funded by a loan from a financial institution). No TCS on business/commercial transactions. (TCS is an income-tax provision, adjustable against your tax liability.)

9 Quick-Facts Cheat Sheet

Point	Key Fact
LRS limit	USD 2,50,000 per FY per resident individual
LRS eligibility	Resident individuals incl. minors (not firms/HUF/trusts)
Forex cash for travel	USD 3,000 per visit (USD 5,000 for Iraq/Libya)
Buy forex before travel	Up to 60 days in advance
Surrender unspent forex	Within 180 days of return
Retain forex	Up to USD 2,000 (or to RFC(D))
Indian currency in/out	₹25,000 (₹10,000 for Pakistan/Bangladesh)
CDF needed if	Forex notes > USD 5,000 or total > USD 10,000
MTSS (inward)	USD 2,500/txn; 30 per year
NRO remittance	USD 1 million per FY

10 Practice MCQs (Tap to Reveal Answers)

A mix of previously-asked and high-probability questions. Attempt first, then tap to check.

Q1The annual limit under the Liberalised Remittance Scheme (LRS) for a resident individual is:

(a) USD 1,00,000
(b) USD 2,50,000
(c) USD 5,00,000
(d) USD 25,000

Tap to reveal answer

Answer: (b) USD 2,50,000 per financial year (April–March), tracked at PAN level.

Q2LRS is available to:

(a) Companies
(b) Partnership firms
(c) Resident individuals (including minors)
(d) HUFs only

Tap to reveal answer

Answer: (c) Resident individuals (including minors). It is not available to firms, HUFs, trusts or corporates.

Q3How much foreign currency can a traveller carry in cash per visit (general countries)?

(a) USD 1,000
(b) USD 3,000
(c) USD 5,000
(d) USD 10,000

Tap to reveal answer

Answer: (b) USD 3,000 per visit. The balance must be carried as forex card, TC or banker’s draft. (Iraq/Libya: USD 5,000.)

Q4Unspent foreign exchange must be surrendered within how many days of return?

(a) 30 days
(b) 90 days
(c) 180 days
(d) 365 days

Tap to reveal answer

Answer: (c) 180 days. However, up to USD 2,000 may be retained indefinitely or credited to an RFC(D) account.

Q5An individual may retain foreign exchange (notes/TCs) up to:

(a) USD 500
(b) USD 1,000
(c) USD 2,000
(d) USD 5,000

Tap to reveal answer

Answer: (c) USD 2,000. This can be kept indefinitely for future use or credited to an RFC(D) account.

Q6Each inward remittance under the Money Transfer Service Scheme (MTSS) is capped at:

(a) USD 1,000
(b) USD 2,500
(c) USD 5,000
(d) No limit

Tap to reveal answer

Answer: (b) USD 2,500 per transaction; a beneficiary can receive a maximum of 30 such remittances per year.

Q7Prohibited current-account transactions are listed in which schedule of the Current Account Transaction Rules, 2000?

(a) Schedule I
(b) Schedule II
(c) Schedule III
(d) Schedule IV

Tap to reveal answer

Answer: (a) Schedule I. Schedule II needs Government approval; Schedule III needs RBI approval (now within LRS).

Q8An NRI can remit out of an NRO account up to how much per financial year?

(a) USD 2,50,000
(b) USD 5,00,000
(c) USD 1 million
(d) No limit

Tap to reveal answer

Answer: (c) USD 1 million per financial year (out of NRO balances). NRE/FCNR funds are fully repatriable.

Q9How many days before travel can foreign exchange be purchased?

(a) 15 days
(b) 30 days
(c) 60 days
(d) 180 days

Tap to reveal answer

Answer: (c) 60 days. Forex purchased but not used within 60 days must be surrendered.

Q10A Currency Declaration Form (CDF) is required when foreign-currency notes brought into India exceed:

(a) USD 2,000
(b) USD 5,000
(c) USD 3,000
(d) USD 1,000

Tap to reveal answer

Answer: (b) USD 5,000 (in notes/coins), or if the aggregate forex including TCs exceeds USD 10,000.

Q11A resident returning from a country other than Nepal/Bhutan may bring in Indian currency up to:

(a) ₹10,000
(b) ₹25,000
(c) ₹1,00,000
(d) No limit

Tap to reveal answer

Answer: (b) ₹25,000. For travel to/from Pakistan or Bangladesh, the limit is ₹10,000.

Q12Remittance out of lottery winnings is:

(a) Allowed under LRS
(b) A prohibited transaction
(c) Allowed up to USD 2,50,000
(d) Allowed with RBI approval

Tap to reveal answer

Answer: (b) A prohibited transaction (Schedule I). Income from racing/riding and purchase of lottery tickets are also prohibited.

Q13For travel to Iraq and Libya, foreign currency in cash can be drawn up to:

(a) USD 3,000
(b) USD 5,000
(c) USD 10,000
(d) Full amount

Tap to reveal answer

Answer: (b) USD 5,000. For Iran, Russia and CIS countries, the entire amount can be drawn in cash.

Q14Under the Rupee Drawing Arrangement (RDA), the limit on inward personal remittances is:

(a) USD 2,500
(b) USD 10,000
(c) USD 2,50,000
(d) No limit

Tap to reveal answer

Answer: (d) No limit for personal remittances. (MTSS, by contrast, has a USD 2,500 per-transaction cap.)

Q15For remittance towards medical treatment or studies abroad, the LRS limit can be exceeded if:

(a) Never
(b) Supported by an estimate from the hospital/institution
(c) Only with court order
(d) Only for NRIs

Tap to reveal answer

Answer: (b) Supported by an estimate from the hospital/institution. The estimate justifies amounts above USD 2,50,000.

Q16TCS on general LRS remittances (above the threshold) is levied at:

(a) 5%
(b) 10%
(c) 20%
(d) 1%

Tap to reveal answer

Answer: (c) 20% on general remittances above ₹10 lakh in a financial year (5% for education/medical; 0% for education via loan).

60-Second Quick Revision

LRS → USD 2,50,000 / FY · resident individuals.

Not LRS → firms, HUF, trusts.

Forex cash → USD 3,000/visit (Iraq/Libya 5,000).

Buy forex → up to 60 days before travel.

Surrender unspent → within 180 days.

Retain forex → up to USD 2,000 / RFC(D).

Indian currency → ₹25,000 (₹10,000 Pak/Bangla).

CDF → notes > USD 5,000 / total > USD 10,000.

Schedule I → prohibited.

Schedule II → Govt approval.

Schedule III → RBI / LRS.

MTSS → USD 2,500/txn · 30/year.

RDA → no limit (personal).

NRO remittance → USD 1 million / FY.

Foreign Exchange Remittance Facilities for Individuals