# Schedule III (Part 1) — Permissible Current Account Transactions by an INDIVIDUAL

Schedule III lays down per-transaction limits. Drawal within the limit is permitted freely through an Authorised Dealer; drawal beyond the limit requires prior RBI approval. The framework is closely linked to the Liberalised Remittance Scheme (LRS) — the overall cap of USD 2,50,000 per Financial Year is the unifying ceiling for resident individuals across multiple heads.

## The Individual Limits Table

Type of Transaction	Limit / Conditions
Private visit (other than Nepal & Bhutan)	Up to USD 2,50,000 aggregate per financial year from an Authorised Dealer. Number of visits is irrelevant.
Gift or Donation	Up to USD 2,50,000 per financial year — as gift to a person residing outside India or donation to an organisation outside India.
Going abroad for Employment	Up to USD 2,50,000 per financial year from any Authorised Dealer.
Emigration	Up to USD 2,50,000 OR the amount prescribed by the country of emigration — whichever is higher.
Maintenance of close relatives abroad	Up to USD 2,50,000 per financial year.
Business trip	Up to USD 2,50,000 per financial year. Number of visits is irrelevant.
Medical treatment abroad	Up to USD 2,50,000 without any estimate from a doctor. For higher amounts, AD may release after receiving estimate from doctor (Indian or foreign). An attendant may also draw up to USD 2,50,000 per financial year.
Studies abroad	Up to USD 2,50,000 without any estimate from the foreign university. For higher amounts, AD may release after receiving estimate from the foreign university.

## Three Foundational Rules

1. Excess beyond limit → Prior approval of the Reserve Bank of India is required.

2. LRS reduction rule: If an individual has already remitted any amount under the Liberalised Remittance Scheme in a financial year, the limit for the same individual is reduced by the amount already remitted. Effectively, the USD 2,50,000 is a shared annual envelope.

3. Not Permanently Resident — Net Salary Rule: A person who is resident but not permanently resident in India may remit up to his net salary (after tax, PF, other deductions). This applies if he is —

(a) a citizen of a foreign State other than Pakistan; or
(b) a citizen of India on deputation to the office/branch of a foreign company (or its subsidiary/JV in India).

## 'Resident but Not Permanently Resident' — Defined

> A person resident in India on account of his employment or deputation of a specified duration (irrespective of length) or for a specific job/assignment, the duration of which does NOT exceed 3 years, is a resident but not permanently resident.

This matters because such persons may remit their entire net salary, not just USD 2,50,000.

## Application to Non-Individuals

> A person other than an individual may also avail of the foreign exchange facility, mutatis mutandis, within the limit prescribed under the LRS, for the purposes mentioned above.

So a body corporate too can use the heads above, with necessary adaptations.

Worked example

### Example 1

Example — LRS reduction rule:

Mr A has already remitted USD 1,00,000 under LRS in FY 2025-26 for buying foreign shares.

He now wants to remit funds for his daughter's foreign education in the same FY.
His remaining envelope = USD 2,50,000 − USD 1,00,000 = USD 1,50,000 without RBI approval.
Beyond USD 1,50,000, prior RBI approval is required (unless an estimate from the foreign university supports a higher amount under the Studies head).

### Example 2

Example — Emigration 'higher of' rule:

Ms B is emigrating to Australia, which prescribes a minimum settlement amount of AUD 5,00,000 ≈ USD 3,30,000.

Limit = higher of (USD 2,50,000, USD 3,30,000) = USD 3,30,000.
She can draw the full prescribed country amount without separate RBI approval.

### Example 3

Example — Medical treatment with attendant:

Mr C requires treatment in Singapore. His doctor's estimate is USD 4,00,000.

He can draw USD 4,00,000 (AD will release after receiving the estimate).
Additionally, his wife travelling as attendant can draw up to USD 2,50,000 in the same financial year.

### Example 4

Example — Resident but not permanently resident:

Mr D, a US citizen, is in India on a 2-year employment assignment.

He satisfies condition (a) — foreign citizen (not Pakistani) — and his assignment is under 3 years.
He may remit his entire net salary (after taxes, PF, other deductions) — not limited to USD 2,50,000.

⚠️ Common exam mistakes

Treating USD 2,50,000 as a per-transaction limit. It is the aggregate per financial year across LRS-covered heads — reused, not stacked.
Forgetting the LRS reduction rule — every LRS remittance in the FY eats into the cap available for other heads.
Overlooking that medical and studies allow drawal above USD 2,50,000 with estimate from doctor/university — these are not hard caps.
Missing the attendant's separate USD 2,50,000 entitlement for medical travel.
Confusing 'resident but not permanently resident' rule — note that Pakistani citizens are excluded from limb (a); only foreign citizens other than Pakistani citizens qualify.
Applying the 'higher of' rule (emigration) to other heads. It applies only to emigration.
Forgetting that for private visits and business trips, the limit is per financial year regardless of the number of visits.

Reference: Schedule III — Part on Individuals — Foreign Exchange Management (Current Account Transactions) Rules, 2000

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Schedule III — Permissible Current Account Transactions by an Individual (LRS)

Worked example

⚠️ Common exam mistakes