The Ministry of Finance on May 16, 2023 notified the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 (“Amendment”) effectively bringing the payment made through International Credit Card by a resident individual outside India within the limit of USD 2,50,000/- (“LRS Limit”).
I . AMENDMENT:
As per Rule 5 of Foreign Exchange Management (Current Account Transactions) Rules, 2000 (“Current Accounts Rules”) any foreign exchange facility for the transactions specified in Schedule III of the Current Account Rules (i.e. gifts, travel expenses, medical expenses, emigration, education expenses etc.) shall require Reserve Bank of India's approval if the payment for such transactions breaches LRS Limit, subject to certain conditions, in a financial year.
Furthermore, as per Rule 7 of the Current Account Rules any expenses made by a person visiting outside India through an International Credit Card was excluded from the purview of LRS Limit. However, pursuant to the Amendment, Rule 7 stands omitted, hence any expenses by a resident individual during his visit outside India through an International Credit Card shall be subject to the LRS Limit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.