Pan Card is now mandatory for sending the money abroad under the revised norms. The government has decided to make the Liberalized Remittance Scheme stricter wherein an Individual who is availing the benefit of the scheme should be furnish the Pan card as and when required.
Earlier, if the beneficiary of the scheme is ceiling the transmit to $25,000 there was no requirement of the Pan Card. However, under the new norm, this ceiling has been removed.
What is Liberalized Remittance Scheme?
The window was offered in the form of LRS by the government of India for the remittance of money across the border without having to go in length about the complicated process otherwise. However, the scheme is only for the individuals and not for the corporates, trusts, partnership firms and Hindu undivided family. An individual is eligible for availing the remittance for:
- Overseas Education
- Medical Treatment
- Purchase of Shares and Property
- Relative living abroad
Capital Transaction Under LRS
There are certain capital transaction allowed under the LRS scheme for an Individual:-
- Opening a foreign Currency account with the bank abroad
- Purchase of the property abroad
- Investing in Mutual funds, promissory notes, venture capital firms and unrated debt securities
- For acquisition of shares of both listed or unlisted overseas company or debt instruments
- Acquisition of ESOPs
Establishing wholly owned subsidiary and joint ventures for bonafide business subjected to the terms and conditions mentioned in the Notification No FEMA.263/ RB-2013 dated March 2013.
For loans to NRIs who are relatives as per the Companies Act, 1956.
Current Transaction Under LRS
- Business Trip
- Private Visits
- Maintenance of Close Relatives
- Medical Treatment
- Facilities of students studying abroad
The resident individual should assign a branch of an AD through which the entire remittance under the scheme should take place. For someone who is looking to take the benefit under the scheme should also furnish form A2 as an annexure for the purchase of foreign exchange.
More commonly known as AD, an Individual is authorized by the Reserve Bank of India under section (10) of Foreign Exchange Management Act 1999(FEMA) in order to deal with the foreign exchange or foreign securities transactions. Usually, banks are categorized as Ads
As RBI realized that several Indian citizens, businessman, diamond traders and Bollywood celebrities have been stashing money abroad to bet on the properties and stocks and therefore remitting way more than the limit. Therefore, under the new rule, PAN Card has been made mandatory for everyone who takes the benefit under the scheme. Apart from that, remittance under the scheme can also be used to purchase the art subject under provision of the applicable laws.