{"id":25934,"date":"2026-02-09T15:24:00","date_gmt":"2026-02-09T09:54:00","guid":{"rendered":"https:\/\/blog.razorpay.in\/blog\/?p=25934"},"modified":"2026-03-30T22:38:35","modified_gmt":"2026-03-30T17:08:35","slug":"current-account-transactions-under-fema","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/current-account-transactions-under-fema\/","title":{"rendered":"Current Account Transactions Under FEMA: A Complete 2026 Guide"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Cross-border transactions touch every Indian business dealing internationally, from SaaS companies receiving subscription payments to freelancers invoicing foreign clients. <\/span><b>Current account transactions under FEMA<\/b><span style=\"font-weight: 400;\"> cover these routine international payments for trade, services, and personal expenses that don&#8217;t alter your overseas assets. Understanding which transactions qualify, what approvals you need, and how new regulations impact your operations saves you from regulatory penalties and blocked payments.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Foreign Exchange Management Act (FEMA) permits most current account transactions freely, but three critical schedules determine what&#8217;s prohibited, what needs government approval, and what requires RBI clearance. Recent 2025 updates extend export realisation timelines to 15 months and maintain TCS rates at 20% for most remittances above \u20b910 lakhs. This guide breaks down exactly what you need to know for compliant international operations.<\/span><\/p>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<h2 style=\"color: #0073aa; font-size: 18px; margin: 0 0 8px 0; display: inline-block;\">Key takeaways<\/h2>\n<ul style=\"display: inline-block; margin: 0 0 0 10px; padding-left: 18px; vertical-align: top;\">\n<li>Current account transactions include foreign trade payments, travel, education, medical expenses, and interest payments that don&#8217;t change your overseas assets.<\/li>\n<li>Three schedules govern approvals: Schedule I (prohibited), Schedule II (government approval needed), and Schedule III (RBI limits apply).<\/li>\n<li>Individual residents can remit up to $250,000 annually under LRS with TCS rates between 0.5% to 20% above \u20b910 lakhs.<\/li>\n<li>Exporters must realise and repatriate proceeds within 15 months (extended from 9 months in November 2025).<\/li>\n<li>Bank wire fees typically range from \u20b9200 to \u20b91,000 for inward remittances, plus forex markups of 1.0% to 3.5%.<\/li>\n<\/ul>\n<\/div>\n<h2><b>What Qualifies as a Current Account Transaction under FEMA?<\/b><\/h2>\n<p><a href=\"https:\/\/razorpay.com\/blog\/foreign-exchange-management-act-fema\/\">FEMA<\/a> defines current account transactions as any transaction other than a capital account transaction, specifically including payments for foreign trade, services, interest on loans, and family remittances abroad. This inclusive definition means that if a transaction doesn&#8217;t alter your assets or liabilities outside India, it likely qualifies as a current account.<\/p>\n<h3><b>Payments for Foreign Trade and Business Services<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Export and import payments for goods and services<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Short-term banking and credit facilities in the ordinary business course<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consultancy fees and professional service charges<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Software subscriptions and <a href=\"https:\/\/razorpay.com\/solutions\/saas\/\">SaaS payments<\/a><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Commission payments to overseas agents (except equity-linked)<\/span><\/li>\n<\/ul>\n<h3><b>Interest and Income from Investments<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Interest payments on foreign loans<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Dividend income from overseas investments<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rental income from properties abroad<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Returns from mutual funds or bonds held overseas<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The principal investment remains capital account, but the income generated qualifies as a current account.<\/span><\/p>\n<h3><b>Personal Remittances and Expenses<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Living expenses for family members residing abroad<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Education fees and related costs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Medical treatment expenses overseas<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Foreign travel and accommodation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gifts and donations within prescribed limits<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<h2 style=\"color: #0073aa; font-size: 18px; margin: 0;\">Did You Know?<\/h2>\n<p style=\"margin-top: 10px;\"><i><span style=\"font-weight: 400;\">The November 2025 RBI amendment extended the export realisation timelines from 9 months to 15 months, giving exporters more flexibility to collect delayed payments.<\/span><\/i><\/p>\n<\/div>\n<h2><b>How Do Current Account Transactions Differ from Capital Account Transactions?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">While current account transactions covered routine business and personal payments, capital account transactions fundamentally alter your balance sheet by changing overseas assets or liabilities.<\/span><\/p>\n<h3><b>Comparison of Transaction Types<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Parameter<\/b><\/td>\n<td><b>Current Account Transaction<\/b><\/td>\n<td><b>Capital Account Transaction<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Focus<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Trade, income, and operational expenses<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Investment in assets and liabilities<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Examples<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Import payment, service fee, travel expense<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Buying property abroad, overseas equity investment<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Effect on Assets<\/b><\/td>\n<td><span style=\"font-weight: 400;\">No change to overseas assets\/liabilities<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Direct change to overseas assets\/liabilities<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>FEMA Rule<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Generally permitted unless specified<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Generally prohibited unless permitted<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Regulatory Stance<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Liberal approach with specific restrictions<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Conservative approach with specific permissions<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><b>Why the Distinction Matters for Compliance<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Different reporting forms<\/b><span style=\"font-weight: 400;\">: Current account uses Form A2 while capital account requires FC-GPR or ODI forms<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Penalty structures<\/b><span style=\"font-weight: 400;\">: Misclassification triggers penalties ranging from warning letters to 3x the transaction amount<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Processing delays<\/b><span style=\"font-weight: 400;\">: Incorrect classification causes remittance blocks requiring weeks of bank correspondence<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Documentation needs<\/b><span style=\"font-weight: 400;\">: The capital account demands extensive approvals, while the current account needs basic invoices<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Banks scrutinise transaction purpose codes carefully, and wrong classification immediately flags RBI compliance systems.<\/span><\/p>\n<h2><b>What Are the Three Approval Routes for Current Account Transactions?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The distinction between permitted and restricted transactions determines your approval pathway. The Foreign Exchange Management (Current Account Transactions) Rules, 2000, establish the following three schedules to create a clear hierarchy:<\/span><\/p>\n<h3><b>Schedule I: Strictly Prohibited Transactions<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">These transactions face a complete ban on foreign exchange withdrawal:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Remittances from lottery winnings<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Income from racing, riding, or other hobbies<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Purchase of lottery tickets or banned magazines<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sweepstakes and gambling proceeds<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Commission on exports for equity investment in overseas JV\/WOS<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Remittance of dividends by companies where dividend payment requires RBI approval<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Payment related to &#8220;Call Back Services&#8221; of international telecom operators<\/span><\/li>\n<\/ul>\n<h3><b>Schedule II: Transactions Requiring Central Government Approval<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Specific ministries must pre-approve these transactions:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cultural tours<\/b><span style=\"font-weight: 400;\">: Ministry of Human Resource Development approval needed<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Advertisement in foreign print media<\/b><span style=\"font-weight: 400;\">: State governments\/PSUs need approval above $10,000<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Freight remittance by PSUs<\/b><span style=\"font-weight: 400;\">: Requires government clearance<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Prize money\/sponsorship<\/b><span style=\"font-weight: 400;\">: Sports activities above $100,000 need approval<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Multi-modal transport operators<\/b><span style=\"font-weight: 400;\">: Registration from the Director General of Shipping is required<\/span><\/li>\n<\/ul>\n<h3><b>Schedule III: Transactions Requiring RBI or Bank Approval<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">These transactions have monetary limits under the Liberalised Remittance Scheme:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Remittances exceeding $250,000 annually need RBI approval<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Medical treatment above the estimates requires additional documentation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Education expenses beyond the institution&#8217;s estimates need justification<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gift remittances above the prescribed individual limits<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<p style=\"color: #0073aa; font-size: 18px; margin: 0;\"><strong><span style=\"color: #0073aa;\"><span style=\"font-size: 18px;\">Pro Tip: <\/span><\/span><\/strong><span style=\"color: rgba(0,0,0,0.74); font-size: 19px; font-weight: 400;\">Check your transaction against all three schedules before initiating. If not listed anywhere, proceed through your authorised dealer bank with standard KYC documents.<\/span><\/p>\n<\/div>\n<h2><b>What Are the LRS Limits and TCS Rules for 2026?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The Liberalised Remittance Scheme governs how much individuals can remit annually, while new TCS rules significantly impact remittance costs above \u20b910 lakhs.<\/span><\/p>\n<h3><b>LRS Remittance Limits for Individuals<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Annual limit<\/b><span style=\"font-weight: 400;\">: $250,000 per financial year (April to March) for all purposes combined<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Coverage<\/b><span style=\"font-weight: 400;\">: Both current account (travel, education) and capital account (property, shares) transactions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reset<\/b><span style=\"font-weight: 400;\">: Limit refreshes every April 1st, regardless of the previous year&#8217;s utilisation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Family members<\/b><span style=\"font-weight: 400;\">: Each family member gets a separate $250,000 limit<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Clubbing prohibited<\/b><span style=\"font-weight: 400;\">: Cannot combine family limits for a single large transaction<\/span><\/li>\n<\/ul>\n<h3><b>Current TCS Rates and Thresholds (2026 Update)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The \u20b910 lakh threshold triggers different TCS rates based on remittance purpose:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Purpose<\/b><\/td>\n<td><b>TCS Rate Above \u20b910 Lakhs<\/b><\/td>\n<td><b>Key Conditions<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Education (Loan-funded)<\/b><\/td>\n<td><span style=\"font-weight: 400;\">0.5%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Must provide education loan sanction letter<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Education (Self-funded)<\/b><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Direct payment without loan documentation<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Medical Treatment<\/b><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Hospital estimates and medical visa required<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Overseas Tour Packages<\/b><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Includes all travel agency bookings<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Other Remittances<\/b><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Investment, gifts, maintenance, property<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">TCS isn&#8217;t additional tax but advance tax collection. Claim full credit when filing Income Tax Returns.<\/span><\/p>\n<h2><b>How to Handle Inward Current Account Transactions (Exports)<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Inward export-related transactions are governed by FEMA export regulations and focus on the timely realisation and repatriation of proceeds within prescribed timelines, rather than LRS limits or TCS.<\/span><\/p>\n<h3><b>FEMA Guidelines for Realizing Export Proceeds<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Realisation deadline<\/b><span style=\"font-weight: 400;\">: 15 months from export date (extended from 9 months in November 2025)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Documentation requirements<\/b><span style=\"font-weight: 400;\">: Invoice, bill of lading\/airway bill, service contracts for AD bank<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>FIRC issuance<\/b><span style=\"font-weight: 400;\">: Banks provide a Foreign Inward Remittance Certificate as payment proof<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Write-off procedures<\/b><span style=\"font-weight: 400;\">: Unrealised proceeds beyond 15 months need an AD bank application for regularisation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Monitoring<\/b><span style=\"font-weight: 400;\">: AD banks track timelines through <a href=\"https:\/\/razorpay.com\/blog\/edpms-export-data-processing-monitoring-system\/\">EDPMS<\/a> (Export Data Processing and Monitoring System)<\/span><\/li>\n<\/ul>\n<h3><b>Reducing Costs on Inward Remittances<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Traditional wire transfers impose high costs on exporters. Typical fee structure includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bank inward handling fee: \u20b9200 to \u20b91,000<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Forex markup: 1.0% to 3.5% of transaction value<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">FIRC issuance: \u20b9100 to \u20b9500<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Correspondent bank charges: Variable based on routing<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">For a \u20b96,00,000 SaaS invoice, total fees reach \u20b911,550, leaving net proceeds of \u20b95,88,450.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Modern solutions like Razorpay <a href=\"https:\/\/razorpay.com\/blog\/money-saver-export-account\/\">MoneySaver Export Account<\/a> reduce these costs by creating local collection accounts in buyer countries, avoiding <a href=\"https:\/\/razorpay.com\/learn\/what-is-swift\/\">SWIFT<\/a> fees while maintaining full <a href=\"https:\/\/razorpay.com\/blog\/foreign-exchange-management-act-fema\/\">FEMA<\/a> compliance.<\/span><\/p>\n<h2><b>How Razorpay MoneySaver Export Account Simplifies Inward Remittances<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Create local currency accounts in markets such as the US, UK, and Europe to receive payments through local networks like <a href=\"https:\/\/razorpay.com\/blog\/business-banking\/ach-transfers\/\">ACH<\/a> and <a href=\"https:\/\/razorpay.com\/blog\/sepa-payments-explained\/\">SEPA<\/a>, avoiding high SWIFT fees. This setup reduces forex and correspondent bank charges, lowers hidden spreads, and can save up to 50% on transaction costs while remaining fully compliant with FEMA. Automated e-FIRCs for each payment simplify export processing, ensure compliance with the 15-month deadline, and maintain clear audit trails for GST and income tax compliance.<\/span><\/p>\n<div style=\"background: #f5faff; border-radius: 14px; padding: 30px; text-align: center; margin: 42px 0; box-shadow: 0 8px 20px rgba(26,115,232,0.08);\">\n<h2 style=\"color: #1a73e8; font-size: 24px; font-weight: bold; margin-bottom: 12px;\"><strong>Simplify Inward Remittances with Razorpay<\/strong><\/h2>\n<p style=\"color: #444; font-size: 16px; max-width: 720px; margin: 0 auto 18px; line-height: 1.6;\"><strong>Open local accounts in the US, UK &amp; EU, receive via ACH\/SEPA, skip SWIFT fees, and auto-generate e-FIRCs\u2014fully FEMA-compliant.<\/strong><\/p>\n<p><a style=\"display: inline-block; background: #1a73e8; color: #ffffff; padding: 14px 26px; font-size: 16px; font-weight: bold; border-radius: 10px; text-decoration: none;\" href=\"https:\/\/razorpay.com\/accept-international-payments\/bank-transfers\/?utm_source=blog&amp;amp;utm_medium=referral&amp;amp;utm_campaign=internationalpayments%22%3E%3Cem%3E%3Cstrong%3ERazorpay%E2%80%99s&quot;\">Explore Razorpay\u2019s MoneySaver Export Account<\/a><span style=\"font-size: 19px; background-color: #ffffff;\">\u00a0<\/span><\/p>\n<\/div>\n<h2><b>Conclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Understanding current account transactions under FEMA involves knowing the approval schedules, LRS limits with TCS implications, and the 15-month export realisation timeline. Most routine international payments qualify as current account transactions unless specifically restricted.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Effective compliance requires checking Schedule I prohibitions and Schedule II approval requirements before remittance, monitoring the \u20b910 lakh TCS threshold, and using automated export solutions that lower wire costs while providing instant e-FIRCs.<\/span><\/p>\n<h2><b>FAQs<\/b><\/h2>\n<h3><b>1. What is the difference between a current account transaction and a capital account transaction under FEMA?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Current account transactions relate to routine payments such as trade, travel, or interest that do not change assets or liabilities. In contrast, capital account transactions involve activities such as overseas property purchases that alter assets or liabilities.<\/span><\/p>\n<h3><b>2. What is the LRS limit for the financial year 2025?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Under the Liberalised Remittance Scheme, resident individuals may remit up to $250,000 per financial year (April\u2013March) for permitted current and capital account transactions without prior RBI approval.<\/span><\/p>\n<h3><b>3. Which current account transactions are prohibited under FEMA?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">FEMA prohibits remittances from lottery winnings, racing income, the purchase of lottery tickets, and payments for banned magazines or sweepstakes.<\/span><\/p>\n<h3><b>4. Is government approval required for all current account transactions?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">No. Approval is required only for specific transactions listed in Schedule II, such as certain cultural tours, high-value foreign advertisements by State Governments, and select PSU freight remittances.<\/span><\/p>\n<h3><b>5. What are the applicable TCS rates on foreign remittances in 2025?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">For remittances above \u20b910 lakh, TCS is 0.5% for loan-funded education, 5% for self-funded education or medical treatment, and 20% for other remittances, including overseas tour packages.<\/span><\/p>\n<h3><b>6. What is the time limit for realising export proceeds under FEMA?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Export proceeds must be realised and repatriated to India within 15 months from the date of export.<\/span><\/p>\n<h3><b>7. How can exporters reduce inward remittance costs?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Exporters can use solutions such as local-currency collection accounts to receive funds through domestic payment networks, reduce wire fees, and obtain automated e-FIRCs.<\/span><br \/>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the difference between a current account transaction and a capital account transaction under FEMA?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Current account transactions relate to routine payments such as trade, travel, or interest that do not change assets or liabilities. In contrast, capital account transactions involve activities such as overseas property purchases that alter assets or liabilities.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the LRS limit for the financial year 2025?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Under the Liberalised Remittance Scheme, resident individuals may remit up to $250,000 per financial year (April\u2013March) for permitted current and capital account transactions without prior RBI approval.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Which current account transactions are prohibited under FEMA?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"FEMA prohibits remittances from lottery winnings, racing income, the purchase of lottery tickets, and payments for banned magazines or sweepstakes.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Is government approval required for all current account transactions?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"No. Approval is required only for specific transactions listed in Schedule II, such as certain cultural tours, high-value foreign advertisements by State Governments, and select PSU freight remittances.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What are the applicable TCS rates on foreign remittances in 2025?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"For remittances above \u20b910 lakh, TCS is 0.5% for loan-funded education, 5% for self-funded education or medical treatment, and 20% for other remittances, including overseas tour packages.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the time limit for realising export proceeds under FEMA?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Export proceeds must be realised and repatriated to India within 15 months from the date of export.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"How can exporters reduce inward remittance costs?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Exporters can use solutions such as local-currency collection accounts to receive funds through domestic payment networks, reduce wire fees, and obtain automated e-FIRCs.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cross-border transactions touch every Indian business dealing internationally, from SaaS companies receiving subscription payments to freelancers invoicing foreign clients. Current account transactions under FEMA cover these routine international payments for trade, services, and personal expenses that don&#8217;t alter your overseas assets. Understanding which transactions qualify, what approvals you need, and how new regulations impact your<\/p>\n","protected":false},"author":86,"featured_media":26523,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1067],"tags":[],"class_list":{"0":"post-25934","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cross-border"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/25934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/86"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=25934"}],"version-history":[{"count":3,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/25934\/revisions"}],"predecessor-version":[{"id":25937,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/25934\/revisions\/25937"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/26523"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=25934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=25934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=25934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}