The Reserve Bank of India (RBI) introduced the Liberalised Remittance Scheme (LRS) on February 4, 2004. Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial for any permissible current or capital account transaction or a combination of both. The Scheme was introduced on February 4, 2004, with a limit of USD 25,000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions. The Scheme is not available to corporates, partnership firms, HUF, Trusts etc. Some negative list prescribed for which remittances cannot be made under LRS. There are do’s and don’ts under LRS. We narrated some common questions and aspects of LRS and it should kept in mind while doing investments under LRS.
No, under LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year.
Yes, Remittances under the facility can be consolidated in respect of family members subject to the individual family members complying with the terms and conditions of the Scheme.
No, Unused/ unspent foreign exchange shall be repatriated/ surrendered within 180 days. So, accumulation of fund is not possible. However, one can go with other planning and compliances.
There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.
No, not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.
The remittances can be made in any freely convertible foreign currency.
Remittances under LRS has to be made out of own funds.
No, borrowed funds cannot be used to remit abroad under LRS for CAPITAL A/C Transactions.