Liberalised Remittance Scheme (LRS):
India’s wealthy individuals have invested all their surplus foreign remittances in various securities over the last few months to comply with a Reserve Bank of India (RBI) diktat that ended last week.
- In August 2022 RBI had directed that any money remitted overseas by Indian residents that remains unutilised for more than 180 days needs to be repatriated back into India
- Under LRS (introduced in 2004), Indian individuals can send money outside up to a maximum of $250,000 in a year.
- LRS simplifies the process of remitting money outside India and encouraging foreign investments by Indian individuals.
- Permissible transactions: education, travel, medical treatment, gifting, investment in shares or property, etc.
- Non-Permissible transactions: Trading in foreign exchange or buying lottery tickets.
- LRS is not available to Corporations, partnership firms, Hindu Undivided Family (HUF), Trusts etc.
- Individuals can diversify their investments and assets, and also provides an opportunity to finance their foreign education or travel.
