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Microlesson · 5-min read

Schedule III Aggregate Limit of USD 2,50,000 for PRI and FATF Restriction

# Schedule III — Aggregate Limit of USD 2,50,000 for a PRI

## The Rule

Under Schedule III of the Liberalised Remittance Scheme (LRS) / FEM (CAT) framework, a Person Resident in India (PRI) can undertake certain capital and current account transactions abroad subject to an aggregate limit of USD 2,50,000 per financial year.

## How the Limit is Computed (Aggregation)

The USD 2,50,000 limit is the aggregate of:

  • Schedule III Current Account Transactions (e.g., private visit, gift, donation, employment abroad, emigration, education, medical treatment, maintenance of relatives abroad, business travel etc.), PLUS
  • Schedule I of CAT transactions undertaken by the PRI (LRS-permitted capital account remittances).

Thus the same USD 2,50,000 ceiling covers both the Schedule III current account transactions AND the LRS capital account transactions taken together in a financial year.

## Important Restriction on Use of Remittance

No part of the USD 2,50,000 remittance shall be used for remittance to countries identified by the FATF (Financial Action Task Force) as Non-Co-operative Countries or Territories (NCCTs).

  • Purpose: To prevent flows to jurisdictions that do not comply with anti-money-laundering / counter-terrorist-financing standards.

## Quick Summary

ParticularsTreatment
Annual aggregate ceilingUSD 2,50,000 per FY per PRI
Items aggregatedSchedule III (Current A/c) + Schedule I (LRS Capital A/c)
Prohibited destinationsCountries identified by FATF as Non-Co-operative

## Reference Note

For the detailed list of permissible transactions under Schedule I and Schedule II, refer to the textbook (these are exhaustive lists notified by the RBI).

Worked example

### Example 1

Example 1: Mr. P (PRI) remits USD 1,00,000 abroad in FY 2025-26 for his son's education (Schedule III — current account) and now wishes to acquire shares of a foreign company under LRS (Schedule I CAT). → He can remit only up to USD 1,50,000 more, since the aggregate cap of USD 2,50,000 covers both Schedule III and Schedule I CAT combined.

### Example 2

Example 2: Ms. Q (PRI) wishes to remit USD 50,000 to a country identified by FATF as a non-co-operative jurisdiction, for permissible LRS purposes. → Not permitted — no part of the LRS ceiling can be used for remittances to FATF-identified non-co-operative countries / territories.

### Example 3

Example 3: Mr. R (PRI) wants to gift USD 3,00,000 to his nephew studying in the USA. → Not permitted — exceeds the FY aggregate ceiling of USD 2,50,000.

⚠️ Common exam mistakes

  • Treating the USD 2,50,000 limit as a separate limit for Schedule I and Schedule III — it is an aggregate ceiling.
  • Forgetting the FATF-related restriction — students often state only the dollar limit but miss the destination-country prohibition.
  • Writing 'FERA' instead of 'FEMA' or referencing wrong schedule numbers.
  • Assuming the limit is per transaction; it is per financial year per individual PRI.
Bare-Act text Schedule III read with Regulation 4 · FEM (Permissible Capital Account Transactions) Regulations, 2000 & RBI Master Direction on Liberalised Remittance Scheme (LRS) · click to expand
The limit of USD 2,50,000 under Schedule III shall include / subsume the eligible remittance for capital account transactions under Schedule I of the FEM (Permissible Capital Account Transactions) Regulations. Further, the facility of remittance shall not be available for remittance to countries identified by the Financial Action Task Force (FATF) as Non-Co-operative Countries and Territories (NCCTs).
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