Fintotal News Analysis | No Curbs on Foreign Remittance for Education, Healthcare
No Curbs on Foreign Remittance for Education, Healthcare
Ruby Jacob, 05 Sep 2013

A few days ago RBI had imposed restrictions on overseas transfer of funds by residents. However it has clarified that the limits do not apply for funds transferred abroad for foreign education, healthcare or medical treatment and such other purposes.

Earlier RBI had brought down the limit of foreign remittance by Indian residents to US$ 75,000 from US$ 2,00,000 a year for investments in shares, debt, property or any other foreign assets. However this applies only to investments which are covered under Liberalised Remittance Scheme (LRS) and not other foreign transactions.

Transfer of funds abroad for purposes of medical treatment, foreign studies, business travel etc are considered current account transactions and do not fall under LRS and are not under special restrictions. Indian residents can continue to send money abroad for such non-capital account transactions without RBI permission up to limits specified by FEMA rules.

FEMA rules lay down limits for overseas money transfer of residents. For educational studies abroad residents can remit higher of US$ 1 lakh or what the institution estimates for a year. In case of medical treatment abroad you can remit what a doctor based in India or abroad estimates as expense. Up to US$ 25,000 can be transferred abroad for a patient going for treatment/check-up abroad or a person accompanying the patient.

RBI had stepped in establish curbs on foreign transfer by residents under LRS which are usually bulk transfers, as part of measures to check outflow of foreign currency and support rupee against depreciating with respect to the US dollar.

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