Indian residents looking to remit funds abroad under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS) have only a few days left to take advantage of the full limit for the current financial year. By remitting $250,000 before March 31, 2025, and another $250,000 at the start of the next fiscal year, individuals can send a total of $500,000 abroad within days.
Understanding the LRS Limit and Its Uses
Under the RBI’s LRS, every resident Indian, including minors (with guardian approval), can remit up to $250,000 per financial year for various permissible transactions, including:
✔ Buying international stocks
✔ Purchasing overseas property
✔ Funding a child’s foreign education
✔ Meeting medical expenses abroad
At the current exchange rate of ₹86 per US dollar, this translates to approximately ₹2.15 crore per person in outward remittances per fiscal year.
Rising Investments in Foreign Assets
A growing number of Indians are investing abroad, with data from October 2024 showing a 78% year-on-year increase in overseas equity and debt investments under LRS. Many are diversifying their portfolios by purchasing US stocks through international brokerage platforms. The process involves:
1️⃣ Opening an international trading account
2️⃣ Converting INR to USD
3️⃣ Completing KYC and LRS formalities
4️⃣ Transferring funds to a foreign bank account
5️⃣ Investing in global markets
New RBI Rule on Unused Forex
For those who have already sent money abroad under LRS, a crucial new RBI rule mandates repatriation of unused foreign exchange. As per the rule effective August 24, 2022, any unspent or unused forex must be surrendered to an authorized dealer within 180 days of receipt, realization, or return to India.
Final Chance to Utilize This Year’s LRS Limit
To maximize remittance benefits, individuals should complete transfers before March 31, 2025. By doing so, they can leverage the LRS limit again in early April, effectively doubling their total remittance capacity over a short period.
