Remittances towards gifts and donations have been brought under the ambit of remittance scheme of individuals up to $1,00,000.

The Reserve Bank of India [Get Quote] has clarified transactions, which could be undertaken through this scheme in a notification to the bankers. This is an extension of the earlier scheme in February 2004, which allowed $25,000 as remittance through individuals.

Now, there is no separate limit for making remittance for gifts and donations, even for smaller denominations.

The remittance scheme can be used for purchase of objects of art or invest in units of mutual funds, venture funds, unrated debt securities and promissory notes. However, the investment in such securities should be done through bank accounts opened abroad sunder the scheme.

Moreover, the investor can retain or reinvest the income earned under this scheme instead of repatriating it. An individual could also repay loan taken abroad and an NRI can pay loan in India on return under the scheme. Outward remittance in the form of demand draft at the time of visit abroad can be made under the scheme but backed by self declaration by the remitter.

While no new items have been permitted by the RBI, it is clearly indicated that the scheme will not be used for remittance towards margins/margin calls to overseas exchanges, for purchase of lottery, sweep stakes, tickets or remittance to Nepal, Bhutan, Mauritius or Pakistan or to individuals posing risks of terrorism.