New Delhi: The rupee crossed the 72 mark against the US dollar last week, and as on 23 September was around ₹70.74. While this may make certain destinations expensive for you, if you are anyway taking that foreign trip you booked in advance, remember that there are certain rules you need to abide by when carrying forex abroad. We tell you a few such rules.
How much to carry
You can only carry forex up to a certain limit when you are travelling abroad.
Under the Liberalized Remittance Scheme (LRS), issued by the Reserve Bank of India (RBI), resident Indians are allowed to freely remit up to $250,000 (around ₹1.77 crore as on 23 September) per financial year for any permissible transactions through banking channels. Remember that the limit is for the financial year and not calendar year. Vinay Bagri, co-founder and CEO, NiYO Solutions, a fintech startup, said, “While travelling abroad, a resident Indian can carry Indian currency (in cash) up to ₹25,000 and foreign currency notes or coins up to $3,000 per foreign trip. The balance amount can be carried in the form of store value cards, traveller’s cheque or banker’s draft."
The important thing to remember here is that these limits apply when you travel to almost all countries in the world, barring a few, including Nepal, Bhutan, Libya, Iraq, Iran and the Russian Federation, among others.
When to buy
Usually, you can buy foreign exchange 180 days before your travel date from an authorized person or dealer. Remember that the law allows you to exchange forex equivalent to up to ₹50,000 if you want it in cash. If the amount of forex you want to buy is equivalent to or more than ₹50,000, the payment should be made by way of a crossed cheque, banker’s cheque, pay order, demand draft, debit card, credit card or prepaid card only.
“There is no specified time limit (to obtain forex) but possession of a valid passport and visa (if required for travel to that country) is required (when exchanging currency)," said Bagri.
Best way to carry
There are several ways you can carry forex such as cash, travel cards and traveller’s cheque. Pankaj Mathpal, a Mumbai-based certified financial planner, said, “Don’t carry currency only in one medium. A combination of forex cards and a little amount of currency works well. You should also activate debt or credit cards for international use when travelling abroad, but avoid using them since there’s a high transaction fee associated with them."
Always be prepared in advance, and never exchange at the airports. “Airports are known to charge a 5-10% margin when you buy or sell currency," said Mathpal. In comparison, dealers typically charge a margin of around 3.5%, banks around 2.5% and online sellers around 0.5%.
Bringing it back
Returning Indians: Mukul Lalka, a Mumbai-based foreign travel expert, said, “There is no limit to bringing back unspent foreign exchange while returning from a foreign trip. But if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers’ cheques brought in exceeds $10,000 or its equivalent and/or the value of foreign currency alone exceeds $5,000 or its equivalent, it should be declared to the customs authorities at the airport in the Currency Declaration Form (CDF), on arrival in India."
Remember, you will need to surrender any unspent foreign money if held in the form of currency notes and travellers’ cheques within 180 days of return. But there’s a limit here too. You can retain foreign exchange up to $2,000 in the form of foreign currency notes or traveller’s cheque for future use or in a special account, if you meet certain conditions.
Resident Indians can keep foreign currency holdings of up to $2,000 in a resident foreign currency (domestic) account. Account holders can keep their money in different currencies, including the US dollar euro, pounds and Japanese yen.
Foreign tourists: There is no limit on how much forex a foreign tourist can bring to India. However, if it’s brought in the form of cash or traveller’s cheque and the aggregate value is more than $10,000 or its equivalent and/or the value of foreign currency alone exceeds $5,000 or its equivalent, it should be declared to the customs authorities on arrival.
If you are taking a foreign trip this holiday season, start preparing now.