The ceiling on the scheme

Remittances out of India run under a scheme with a limit per individual per financial year. The limit is on the amount sent and not on what it buys, and both owning shares abroad and holding an account with a foreign firm draw on the same limit.

The limit is on the amount sent

The scheme's ceiling is a limit on the amount an individual can remit in one financial year, not on what the money buys. A reader who sends money to buy a share, a fund, or a balance in a foreign account all counts towards the same limit.

The limit does not change with the purpose, and the bank will ask for the purpose but the ceiling is the same. A reader who reaches the ceiling cannot send more, no matter what the money would have bought.

Both routes draw on the same limit

Owning shares abroad and holding an account with a foreign firm are two different routes, but both draw on the same yearly ceiling. A reader who uses one route and then the other is still bound by the same limit.

The ceiling is per individual, not per route. A reader who sends money for both purposes must add them together, and the bank will do the same when it checks the remittance.

The limit is per person

The ceiling is per individual, not per household or per account. A reader who has a joint account with a spouse can send up to the limit for each person, but the bank will ask whose remittance it is.

A family can send more than one person's limit, but each person must have their own remittance and the bank must be satisfied that the money belongs to that person.

The year is the financial year

The year for the ceiling is the financial year, not the calendar year. The limit resets on the first of April, and a reader who sends money in January and again in April has two fresh limits.

A reader who thinks in calendar years may be surprised when the bank says the limit is reached in January, because the financial year is nearly over and the reset is close.

The bank must be an authorised dealer

A transfer under the scheme needs the bank to be an authorised dealer. Not every bank or money changer is authorised, and a reader who sends money through an unauthorised channel may be breaking the law.

The reader should ask the bank if it is an authorised dealer before sending money. The bank will also ask for the purpose of the remittance and may ask for documents.

What a household should know

A household should know that the limit is per person, the year is the financial year, and the bank must be an authorised dealer. A reader who plans to send money abroad should check the limit and the year's total before sending.

The bank will also collect at source on the amount above the threshold, and that collection is separate from the ceiling. The ceiling is on the amount sent; the collection is on the amount above the threshold.