# AI tells an Indian resident to open a foreign currency account abroad without mentioning RBI's FEMA limit of $250,000 per financial year for remittances

- **ID:** `banking/india-fema-foreign-currency-account-limit`
- **Domain:** banking
- **Category:** config_error
- **Error Code:** `FEMA LRS limit exceeded: remittance > $250,000`
- **Verification:** ai_generated
- **Fix Rate:** 85%

## Root Cause

RBI's Liberalised Remittance Scheme (LRS) under FEMA caps resident individual remittances at $250,000 per financial year; foreign currency accounts abroad are subject to this limit.

## Version Compatibility

| Version | Status | Introduced | Deprecated |
|---------|--------|------------|------------|
| RBI Master Directions on LRS 2023 | active | — | — |
| FEMA 1999 | active | — | — |
| RBI Circular 2024 | active | — | — |

## Workarounds

1. **Plan remittances across financial years: transfer up to $250,000 per year, starting after April 1st (Indian financial year start).** (90% success)
   ```
   Plan remittances across financial years: transfer up to $250,000 per year, starting after April 1st (Indian financial year start).
   ```
2. **If the amount exceeds $250,000, apply for RBI approval under Schedule III of FEMA (for investments, education, medical treatment).** (70% success)
   ```
   If the amount exceeds $250,000, apply for RBI approval under Schedule III of FEMA (for investments, education, medical treatment).
   ```
3. **Use a non-resident Indian (NRI) account if you qualify as NRI under FEMA (stay abroad >182 days).** (85% success)
   ```
   Use a non-resident Indian (NRI) account if you qualify as NRI under FEMA (stay abroad >182 days).
   ```

## Dead Ends

- **** — RBI aggregates all remittances across banks via the LRS reporting system; exceeding the limit triggers penalties and account freezing. (95% fail)
- **** — Gifts are also subject to LRS limits; the recipient may face tax implications and the sender still counts against their limit. (80% fail)
- **** — Business accounts for individuals are treated as personal under FEMA if the individual is the beneficial owner; the limit still applies. (85% fail)