Form 15CA and 15CB
Every Year, millions of international remittances are done by the Indians all over the world.
In this write up, we would be discussing about remittance of money under Liberalized remittance Scheme (LRS) and filing of form 15CA and 15CB.
Under the LRS, all the individuals who are residents including the minors are allowed to make remittance outside India freely upto USD 2.5 lac in a financial year subject to fulfillment of certain prescribed conditions and filing of necessary forms with the AD bankers including filing of Form 15CA and 15CB.
This LRS scheme was originally introduced in the year 2004 and initial limit of remittance was only USD 25,000 which has kept on increasing year after year and now, the limit per financial year is USD 2.5 lac.
This scheme is not available for remittance made by Companies, Partnership firms, HUF, Trusts etc. Even minor can make remittance under this scheme, however, in such cases, declaration forms need to be countersigned by his/her parents.
Types of remittances which can be made under LRS and for which foreign exchange facility can be availed
For the following purposes, remittances can be made under LRS and foreign exchange facility can be availed namely,
- Personal visit to any country except Bhutan and Nepal
- Making a donation or gift to person broad. In case of gift, no form 15CA and 15CBis required.
- Making a visit to foreign country for employment purpose.
- For the purpose of Emigration
- For making remittances for the maintenance of relatives who are close relatives abroad
- For making business, or for attending a conference or for the purpose of specialized training or for making remittances for medical expenses abroad, or going as an attendant to a patient going abroad for medical treatment.
- For purpose of doing studies in a foreign country
- Any other current account transaction not covered under the definition of current account in FEMA 1999.
Types of remittances which are prohibited under LRS
Following types of remittances are prohibited under LRS:
- Remittances which are prohibited under Schedule-I like purchase of lottery tickets/sweep stakes, purchase of proscribed magazines, etc. or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
- Remittance for margins or margin calls to overseas exchanges / overseas counterparty.
- For the purchase of FCCBs issued by Indian companies in the overseas secondary market.
- Remittance for foreign exchange trading abroad.
- Remittance of Capital account items, to FATF listed countries.
- Remittances to entities or individuals involved in any act of terrorism.
Some requirements to be fulfilled for availing LRS
- Resident individuals must have PAN which needs to be submitted to the banker for all the transactions under LRS.
- There is no restrictions on the frequency of the transactions, however, total limit in a year shall not exceed USD 2,50,000.
- The remitter should maintain bank account with designated AD banker for atleast 1 year prior to remittance. In case of bank account which is new, proper due diligence must be done by the banker and all the necessary KYC documents and Income Tax Return in Indiacopies shall be taken.
- Remitter shall furnish form A2 regarding the purpose of the remittance and give a declaration that the funds will not be uses for any prohibited purpose.
Thus, the RBI has through LRS tried to simplify the entire remittance process for an individual. Now, he don’t have to make substantial compliance at time of remittance abroad and can easily transfer upto USD 2,50,000 every financial year subject to filing of form 15CA and 15CBand submission of some forms and documents.