Economics · Economy
A returned Indian non-resident holds foreign currency in a Resident Foreign Currency (RFC) account. According to FEMA regulations, how are remittances from this RFC account treated regarding capital/current transactions and the LRS annual limit?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1RFC accounts can only be used for medical and educational purposes abroad.
- 2RFC funds must first be converted to Indian Rupees and then remitted under the LRS facility.
- 3Funds held in an RFC account can be used freely for permitted current or capital account transactions without ceiling and do not exhaust the LRS limit.✓
- 4Remittances for property purchase abroad from an RFC account are strictly capped under the USD 250,000 LRS limit.
Correct answer
Funds held in an RFC account can be used freely for permitted current or capital account transactions without ceiling and do not exhaust the LRS limit.
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