What changed
The LRS limit for resident individuals has been reduced from USD 200,000 to USD 75,000 per financial year, effective immediately. Remittances under LRS for acquiring immovable property abroad are no longer permitted. Resident individuals can now set up joint ventures or wholly owned subsidiaries overseas within the reduced limit, subject to FEMA 263/RB-2013 conditions.
What it means for you
Banks must immediately cap all LRS remittances at USD 75,000 per financial year and reject any requests for property purchases abroad under the scheme. The move tightens capital outflows, impacting high-net-worth clients and those planning overseas investments. Banks need to update systems, customer advisories, and compliance checks to reflect the lower limit and new prohibitions.
What you must do
- Update LRS processing systems to cap remittances at USD 75,000 per financial year per individual.
- Reject all LRS remittance requests for acquisition of immovable property outside India.
- Inform customers about the reduced limit and the property ban via notices and direct communication.
- Ensure staff are trained on the new LRS rules, including the allowance for JVs/WOS within the limit.
- Review and adjust gift and loan limits to NRI close relatives to USD 75,000 per financial year.
Who it affects
Category-I Authorised Dealer Banks, Resident individual customers using LRS, NRI close relatives receiving gifts or loans in rupees, Customers planning overseas property investments
What is the new LRS limit for resident individuals?
The limit has been reduced from USD 200,000 to USD 75,000 per financial year, effective immediately.
Can I use LRS to buy property abroad?
No, the scheme can no longer be used for acquiring immovable property outside India, directly or indirectly.
Are there any new allowances under LRS?
Yes, resident individuals can now set up joint ventures or wholly owned subsidiaries abroad within the USD 75,000 limit, subject to FEMA 263/RB-2013 conditions.