The process of transferring funds from your account to an account which is set up in another country. The service for foreign exchange transactions in India comes under Foreign Exchange Management Act (FEMA). The Liberalization Remittance Scheme (LRS) was introduced under this act; it is the part of FEMA which specifies the instructions regarding the exchange of money outside India for the purpose of education. The annual limit set by RBI is $250,000.
Remittance rules to be followed by students
- The total exchange amount is USD 2, 50,000, but in the case of excess financial requirements for purposes of medical expenses and maintenance of close relative abroad, the limit can be exceeded with permission of RBI on submission of documents proving the need of more money.
- All foreign exchange made as gifts or donations fall within the LRS and can’t be accounted as a separate remittance.
- An individual may be permitted to avail more expenses related to studies abroad than the LRS limit of $250,000 if it is required by the university or institute offering the course.
- Students who have taken a loan abroad for studies can return the same upon coming back to India under LRS.
- For travelling purposes, the student is allowed to purchase and carry foreign currency up to USD 3000 and balance in the Forex travel card up to USD 7000.
- In case the recipient is minor, the natural guardian must sign the LRS declaration form.
- If an individual sends an amount under LRS in a financial year, the updated limit for that individual would reduce from USD 250,000 by the remitted amount.
- In the case of obtaining a loan from an authorized dealer in India, a resident’s close relative is eligible to pay back the loan.
- Indian resident can include non-resident close relatives in their bank accounts as joint holders, but they are not eligible to handle the account.
- An NRI can be permitted to create an NRE/FCNR(B) account with their resident close relative. The close relative is eligible to manage the account as the power of attorney holder during the lifetime of NRI.
The international money transfer process is very complex, but the foreign exchange company in Chandigarh can make it easier and beneficial for you.