# Schedule I - Prohibited Current Account Transactions

Drawal of forex by any person for the following purposes is absolutely PROHIBITED - no approval can be sought; these transactions cannot be undertaken in foreign exchange.

## List of Prohibited Transactions

### 1. Lottery-Related Remittances

Remittance out of lottery winnings (sending winnings abroad)
Remittance for purchase of lottery tickets, banned magazines, football pools, sweepstakes

### 2. Income from Hobbies

Remittance of income from racing, riding, or other hobbies

### 3. Dividend (with Dividend Balancing)

Payment of dividend by a company to whom dividend balancing requirement applies

### 4. Commission on Exports

Payment of commission on exports made towards equity investment in JV/WOS abroad under the Rupee State Credit Route

### 5. Commission on Export of Tea & Tobacco

Payment of commission on exports of tea and tobacco by Indian companies, EXCEPT commission up to 10% of invoice value

### 6. Call-Back Services

Payment related to call-back services of telephones

### 7. Interest on NRSR Account

Remittance of interest income on funds held in Non-Resident Special Rupee (NR Special Rupee) Scheme A/c

## Memory Aid - "LH-DC-CC-I"

Lottery (winnings + tickets/magazines/pools)
Hobbies (racing, riding, etc.)
Dividend (when dividend balancing applies)
Commission on exports under Rupee State Credit Route
Commission on tea/tobacco exports (above 10% of invoice)
Call-back telephone services
Interest on NR Special Rupee Scheme A/c

Worked example

### Example 1

Example 1: Mr. X wins USD 10,000 in a Las Vegas lottery and wants to remit it to his US account. Conclusion: Prohibited - remittance out of lottery winnings.

### Example 2

Example 2: An Indian tea exporter wants to pay commission of 8% of invoice value to a foreign agent. Conclusion: Permitted - falls within the 10% exception.

### Example 3

Example 3: Same exporter wants to pay 15% commission. Conclusion: Prohibited to the extent it exceeds 10% of invoice value.

### Example 4

Example 4: Mr. Y wants to remit USD 500 to subscribe to football pool tickets in the UK. Conclusion: Prohibited.

### Example 5

Example 5: An Indian Co. pays commission on exports made under the Rupee State Credit Route towards equity investment in a JV. Conclusion: Prohibited.

⚠️ Common exam mistakes

Allowing 10% commission on all exports - the 10% exception applies ONLY to tea and tobacco exports.
Confusing the Rupee State Credit Route commission prohibition with general export commission - general commission is allowed.
Thinking lottery winnings can be remitted with RBI approval - it is absolutely prohibited (Schedule I).
Forgetting that hobby income (racing, riding) remittance is prohibited regardless of amount.
Confusing NRE/NRO accounts with NR Special Rupee Scheme A/c - interest on the latter is prohibited.

Bare-Act text Rule 3 read with Schedule I · FEM (Current Account Transactions) Rules, 2000 · click to expand

Drawal of foreign exchange by any person for the following purpose is prohibited: (i) a transaction specified in the Schedule I; (ii) a travel to Nepal and/or Bhutan; (iii) a transaction with a person resident in Nepal or Bhutan.

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