What is the Liberalised Remittance Scheme (LRS)?
The Liberalised Remittance Scheme (LRS) is a scheme introduced by the Reserve Bank of India (RBI) that allows resident individuals to freely remit up to USD 2,50,000 per financial year (April-March) for any permitted current or capital account transaction or a combination of both.
Who can avail of the LRS?
The LRS is available to all resident individuals, including minors. However, it is not available to corporates, partnership firms, HUFs, trusts, etc.
What are the permissible current and capital account transactions under the LRS?
The following are some of the permissible current and capital account transactions under the LRS:
- Private visit
- Gift/donation
- Going abroad on employment
- Emigration
- Maintenance of close relatives abroad
- Business trip
- Medical treatment abroad
- Studies abroad
- Investment in foreign securities
- Purchase of immovable property abroad
- Repayment of loans taken from abroad
- Other permitted current or capital account transactions
What is the procedure for remitting money under the LRS?
To remit money under the LRS, you can approach any Authorised Dealer (AD) bank in India. You will need to submit the following documents:
- A valid passport
- A copy of your PAN card
- A letter stating the purpose of the remittance
- A bank draft or demand draft for the amount of remittance
The AD bank will then verify your documents and process the remittance.
What are the penalties for violating the LRS?
Any person who violates the LRS may be subject to the following penalties:
- A fine of up to INR 20,000
- Imprisonment for up to three years
- Or, both
FAQs on the Liberalised Remittance Scheme
Here are some FAQs on the Liberalised Remittance Scheme:
Q: What is the difference between the LRS and the Foreign Exchange Management (Current Account) Rules, 2000?
The LRS is a simplified version of the Foreign Exchange Management (Current Account) Rules, 2000. Under the LRS, you can remit money for a wider range of purposes, without having to obtain prior permission from the RBI.
Q: What is the maximum amount of money that I can remit under the LRS?
The maximum amount of money that you can remit under the LRS is USD 2,50,000 per financial year (April-March).
Q: Can I consolidate my remittances under the LRS with my family members?
Yes, you can consolidate your remittances under the LRS with your family members. The total amount of remittances that can be made by all the members of a family under the LRS is USD 2,50,000 per financial year.
Q: What are the documents that I need to submit to remit money under the LRS?
You need to submit the following documents to remit money under the LRS:
- A valid passport
- A copy of your PAN card
- A letter stating the purpose of the remittance
- A bank draft or demand draft for the amount of remittance
Q: What are the penalties for violating the LRS?
Any person who violates the LRS may be subject to the following penalties:
- A fine of up to INR 20,000
- Imprisonment for up to three years
- Or, both