Money and structure

Liberalised Remittance Scheme

Also called LRS, liberalized remittance scheme.

The Liberalised Remittance Scheme is the Reserve Bank of India facility under which a resident individual, minors included, may remit up to USD 250,000 abroad in a financial year running April to March for any permitted current or capital account transaction, with any overseas investment made under it governed by the Overseas Investment Rules 2022.

What it decides

Paragraph 1 of FED Master Direction No. 7/2015-16, updated as on 6 September 2024, carries the limit, and the Scheme is closed to companies, partnership firms, HUFs and trusts. Every resident individual has it, minors included, with a minor's Form A2 countersigned by the natural guardian, so a family of four holds USD 1,000,000 of headroom on paper. Paragraph 4 is the first trap: remittances may be consolidated for family members, but not for a capital account transaction such as an investment unless the others are co-owners or co-partners, and a resident may not gift foreign currency to another resident's overseas account. Paragraph 7 is the second: an emigrant may draw the amount the destination country prescribes or USD 250,000, and anything above that is allowed only for incidental expenses, never for overseas investment in a commercial enterprise to earn points or credits toward immigration. EB-5 capital therefore travels as Overseas Direct or Portfolio Investment under the Overseas Investment Rules 2022. Paragraph 12 bars banks from extending any credit facility to fund a capital account remittance under the Scheme.

Governed by Reserve Bank of India, FED Master Direction No. 7/2015-16, Master Direction on the Liberalised Remittance Scheme, dated 1 January 2016 and updated as on 6 September 2024, paragraphs 1, 3, 4, 6, 7(d), 12, 15 and 16, which is also where the Foreign Exchange Management (Overseas Investment) Rules, 2022 are cross-referenced. That Master Direction carries every clause above. It is not a source for Indian tax on the remittance: its Section B paragraph 5 states that the Reserve Bank issues no instructions under FEMA on deduction of tax at source, so tax collected at source under section 206C(1G) of the Income-tax Act 1961 has to be checked separately.

Where this is explained properly

Pages here that go into liberalised remittance scheme rather than mentioning it.

Related terms

CapitalCapital is the cash and tangible assets an EB-5 investor contributes to the new commercial enterprise. Two texts define it: the statute, which governs petitions filed on or after 15 March 2022, and the older regulation, whose conditions on debt USCIS still applies alongside the statute.
Source of fundsSource of funds is the documentary showing that an EB-5 investor's required capital, and the money used to pay administrative costs and fees, was obtained from a lawful source and through lawful means, proved by records rather than by assertion.
Path of fundsPath of funds is the account by account trail documenting how the capital moved from its proven source into the new commercial enterprise, and it is a separate showing from proving that the source was lawful.
Form A2 and Forms 15CA and 15CBForm A2 is the application and declaration an Indian resident must furnish to the authorised dealer bank to buy foreign exchange for an outward remittance, while Forms 15CA and 15CB are separate income tax filings for a payment to a non-resident, from which a remittance made by an individual that needs no prior Reserve Bank approval is exempt.
SAFE and China currency controlsSAFE is China's State Administration of Foreign Exchange, and under its rules each individual has an annual facilitation quota of USD 50,000 equivalent, counted separately for settling foreign exchange into renminbi and for buying it, which may not be used for capital account items such as an overseas investment.

Checked against primary sources on 10 August 2026. Back to the glossary