The Reserve Bank of India (RBI) has notified vide notification no. A.P. (DIR Series) Circular No. 06, issued on June 22, 2023 stated the remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS).
The RBI notified the same by addressing the authorised persons notified in the A.P. (DIR Series) Circular No. 11 issued on February 16, 2021 and A.P. (DIR Series) Circular No.03 issued on April 26, 2022. It includes the authorised dealer banks.
The directives in this circular have been issued in accordance with sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999), and they are not intended to preclude any other legal licences or approvals that may be necessary.
It stated that “Presently, remittances to IFSCs under LRS can be made only for making investments in securities in terms of A.P. (DIR Series) Circular No. 11 dated February 16, 2021. In view of the gazette notification no. SO 2374(E) dated May 23, 2022 issued by the Central Government, it is directed that Authorised Persons may facilitate remittances by resident individuals under purpose ‘studies abroad’ as mentioned in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000 for payment of fees to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the gazette notification ibid.”
The RBI has instructed all the authorised bank dealers/ authorised persons to bring the contents of this circular to the notice of their constituents and customers.
Recently, the Finance ministry has clarified the Tax Collection at Source (TCS) collection for modest foreign debit/credit transactions under the Liberalised Remittance Scheme on May 19, 2023.
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