Good news for Indians wishing to buy property in the USA!
Previously in July 2013, the RBI (Reserve Bank of India) had reduced the LRS (Liberal Remittance Scheme) from USD 200,000 to USD 75,000 and also placed a restriction on the purchase of real property.
In a recent circular dated July 2014 [RBI/2014-15/132 A.P. (DIR Series) Circular No.5] the RBI has raised the limits up to USD 125,000 per year and removed the restriction against the purchase of property.
Under the scheme, all Indians, including minors, are allowed to freely remit up to USD 125,000 per financial year (April – March) for any permissible transaction. Resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.
To All Category – I Authorised Dealer Banks
Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the guidelines regarding the Liberalised Remittance Scheme (LRS) for Resident Individuals (the Scheme).
2. It was decided vide A.P.(DIR Series) Circular No. 138 dated June 3, 2014, to increase the limit to USD 125,000 per financial year (April-March) from USD 75,000. Accordingly, AD Category –I banks have been allowed to remit up to USD 125,000 per financial year, under the Scheme, for any permitted current or capital account transaction or a combination of both. Further, it is clarified that the Scheme can now be used for acquisition of immovable property outside India.
The RBI has also posted a FAQ on utilizing this scheme.