## Schedule III – Drawal of Forex Requiring Prior Approval of RBI (if exceeding limits)

Schedule III lists current account transactions where forex up to a prescribed limit is freely permitted; any drawal beyond the limit requires prior approval of RBI. The provisions are split into:

1. Individuals – governed by the Liberalised Remittance Scheme (LRS)

2. Persons other than individuals (companies, firms, trusts)

### Part 1: Individuals – LRS Limit of USD 2,50,000 per FY

An individual (resident) may freely draw forex up to USD 2,50,000 per financial year per person for any or all of the following purposes combined:

Private visit to any country (except Nepal and Bhutan)
Gift or donation
Going abroad for employment
Emigration
Maintenance of close relatives abroad
Travel for business, attending conference, specialised training, etc.
Medical treatment abroad
Studies abroad
Any other current account transaction

### Higher Limit Cases (Beyond USD 2,50,000 without RBI approval)

For emigration, medical treatment abroad and studies abroad, an individual may avail more than USD 2,50,000 without RBI approval if so required by:

The country of emigration (for emigration), or
The institute offering treatment (for medical), or
The University abroad (for studies)

### Key Points

The USD 2,50,000 cap is per financial year per person in aggregate across all purposes.
Drawal beyond limit (other than the three exceptions above) → prior approval of RBI required.

Worked example

### Example 1

Example 1: Mr. A wants to remit USD 1,00,000 for his son's studies abroad and USD 1,50,000 for his own private visit to the USA in the same FY. Allowed?

Answer: Total = USD 2,50,000, which is exactly the LRS limit. Allowed without RBI approval under Schedule III.

### Example 2

Example 2: Mrs. B's medical treatment in Singapore is estimated by the hospital at USD 4,00,000. Can she remit this without RBI approval?

Answer: Yes. Even though it exceeds USD 2,50,000, the estimate from the treating institute justifies a higher drawal. No RBI approval needed.

### Example 3

Example 3: Mr. C wants to gift USD 3,00,000 to a friend abroad. Permissible?

Answer: No. Gifts are capped at USD 2,50,000 under LRS in a FY. To remit USD 3,00,000, prior RBI approval is required for the excess USD 50,000.

⚠️ Common exam mistakes

Treating USD 2,50,000 as a per-transaction limit – it is the aggregate annual limit per person.
Believing the three exceptions (emigration, medical, studies) automatically allow unlimited drawals – the excess must be supported by documentation from the foreign country/institute/university.
Including Nepal and Bhutan in 'private visit abroad' – LRS does NOT cover private visits to these two countries.
Forgetting that LRS is for individuals only – it does not apply to companies, firms or other entities.

Bare-Act text Schedule III read with Rule 5 · FEM (Current Account Transactions) Rules, 2000, as amended by FEM (CAT) Amendment Rules, 2015 · click to expand

Schedule III to the Foreign Exchange Management (Current Account Transactions) Rules, 2000 – Drawal of foreign exchange by a person for the purposes specified shall not exceed the limits specified therein; any drawal in excess shall require prior approval of the Reserve Bank.

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Schedule III - Drawal of Forex by Individuals under Liberalised Remittance Scheme (LRS)

Worked example

⚠️ Common exam mistakes