Restrictions on NRE account remittance

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This discussion clarifies remittance restrictions for Non-Resident External (NRE) accounts compared to the Liberalised Remittance Scheme (LRS). Unlike LRS, which has specific limitations like not allowing US options trading, remittances from NRE accounts generally do not face such restrictions. The conversation also touches upon the timing of becoming an NRI for FEMA purposes and its implications on trading activities.

Guest

Guest (Querist)

09 September 2023 For remittance under LRS, I see there are restrictions (e.g. the foreign currency cannot be used for trading options in US market)
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=115#Q2

Are there any such restrictions for remittance made from NRE account?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 September 2023 No such restrictions for remittance made from NRE account.

Guest

Guest (Querist)

10 September 2023 Thanks for the reply.
I transferred some money via the LRS route a month back.
But now I'm an NRI (moved abroad to take up employment).

Will the money that I sent to my overseas account have the restrictions (such as cannot do margin trading)? Or since I am now an NRI the restrictions dont apply?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 September 2023 Wait till the year end to become NRI.

Guest

Guest (Querist)

10 September 2023 Oh, I see.
I thought from FEMA perspective, I become an NRI immediately if I leave India for employment abroad. Didn't know I'll have to wait till Mar/April 2024 to start trading in US options.

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