For private visits abroad, other than to Nepal and Bhutan, any resident individual can obtain foreign exchange up to an aggregate amount of USD 2,50,000 from an Authorised Dealer or FFMC, in any one financial year, irrespective of the number of visits undertaken during the year, & irrespective of the purpose of that visit – personal or business.
All tour related expenses including cost of transportation; cost of Euro Rail; passes/tickets, etc. outside India; and overseas hotel expenses shall be subsumed under the LRS limit. One can directly bear these expenses in foreign currency at the point of destination or the tour operator can collect this amount either in Indian rupees or in foreign currency from the resident traveller. All options are legal & possible.
Any resident Indian can gift a sum up to US$ 250,000 to his or her relative (as specifically defined) anywhere in the world. Such a gift has to be either to the recipient’s foreign bank account or as a credit to NRI’s bank account maintained in India, termed as NRO – Non-Resident Ordinary Account. The limit of US$ 250,000 is per donor, per financial year. This question should also be evaluated from income tax perspective. For e.g., till 2019, gifts made abroad were not taxable in India, however, post the amendment made by virtue of Finance Act 2019, gifts made by resident Indians to overseas Indians will be taxable in India in certain specified situations.
Yes, one can very well receive gifts from their overseas relatives. Such amount should have been received in India to the credit of a bank account maintained by resident Indian, in India. There is no prohibition under FEMA to receive gifts in India from relatives who are residing abroad. Further, there is no limit prescribed either, hence, one can take any amount of gift in India. Do note that gifted amount must be received in India, in an Indian bank account. Receiving gifts by resident Individuals in a foreign currency account maintained abroad outrightly violates the provisions of FEMA.
Some countries like USA have a system of taxing donors (i.e. person making the gift). These provisions have nothing to with FEMA, but should be kept in mind.
Yes, a resident Indian can open a foreign bank account in a foreign denominated currency. However, such an account must be used ONLY for the purposes specified under LRS. The credit to such accounts should be by way of LRS in lieu of funds remitted from India. Foreign bank accounts can not be used to transact foreign funds.
It doesn’t matter whether gift is from a relative or a non-relative. Either way, foreign bank account can not accept funds directly from a foreign source. Permitting such an activity would lead to severe money laundering as the Government of India would never come to know on funds that came in and funds that went out. This is outrightly prohibited under FEMA.
Yes, a resident individual can pay up to US$ 250,000 per financial year for treatments in a foreign hospital. On request, RBI would normally allow to extend this limit given the cause involved.
Yes, a resident individual can remit funds from India for investing in foreign companies. Do note that such funds should have originated from India; in other words, receiving funds overseas from an overseas source, and directly deploying them overseas would lead to money laundering. This can also lead to an offence under PMLA (Prevention of Money Laundering Act).
You can buy a house anywhere you like in the world. Do note that FEMA doesn’t contain any specific reporting of those investments as long as funds are remitted from India; however, under the provisions of the Income Tax Act, such investments must be reported on Schedule FA and income generated from such foreign assets must be reported in Schedule FI, annually.
FEMA requires the original (first) investment to be done under LRS from India. As long as the funds originated from India, and were compliant with FEMA, the income generated on such an investment need not be repatriated to India. E.g., X invests CAD 11,000 in a Canadian company which pays a dividend of 20% in the second year. In this case, the dividend amount of CAD 2,200 need not be repatriated to India, and can be kept and maintained in X’s Canadian bank account (although X is a resident Indian). However, do note that the initial investment amount of CAD 11,000 should be from India under LRS.
Yes, TCS at 5% shall be applicable on all forex transactions under LRS, exceeding INR 7 lakhs in a financial year (except for remittances towards overseas education made out of loan obtained from a financial institution, for which TCS at a reduced rate of 0.5% will be applicable). For instance, if the total foreign exchange facility availed under LRS in a financial year is INR 11,00,000, TCS at 5% will be applicable on INR 4,00,000 (INR 11,00,000 - INR 7,00,000) and tax collected will be INR 20,000.
Do note that TCS is payable on ALL foreign transactions done by resident Indians, irrespective of the end use of such a remittance.
Note: TCS was not applicable prior to Oct 2020, it was made applicable by virtue of Finance Act 2020.
Yes, as stated above, TCS is applicable @ 5% if such remitted funds are owned funds, and at 0.5% if such remitted funds are specific to an education loan.
Yes, just like any other category of TCS, this is a line item which reflects in Form 26AS. Full credit can be availed for it.
No, GST is not applicable on the amount of TCS.