FEMA Rules for Cross-Border Remittances: A 2026 Refresher

Every year we see well-intentioned founders and finance teams stumble on FEMA — usually because the rules are perceived as static when in fact they have shifted meaningfully in 2024-25.

LRS in 2026

The Liberalised Remittance Scheme continues to permit USD 250,000 per resident per financial year. However, the 20% TCS threshold on tour packages and equity investments is now stricter, and Authorised Dealers are demanding pre-approved purposes for larger tranches.

Inbound remittances and ODI reporting

Foreign investors funding Indian entities must file Form FC-GPR within 30 days of allotment. Overseas Direct Investment reporting (Form APR) is now integrated with the FIRMS portal — but late filings still attract compounding.

Compounding of contraventions

Voluntary disclosure remains the best path if a past contravention is discovered. The RBI's own guidance is that companies which self-report typically settle at ~1.5% of the transaction value; those that are caught pay closer to 5% plus reputational cost.

Action list before your next transaction

• Confirm the purpose code is correctly selected on your AD's platform.
• Retain KYC and beneficial ownership evidence for at least eight years.
• Reconcile FIRMS filings quarterly rather than at year-end.