Liberalised Remittances Scheme : Reserve Bank Of India
Twenty per cent tax on Liberalised Remittances Scheme (LRS) of the Reserve Bank of India is set to kick off soon.
- Liberalised Remittances Scheme (LRS) allows Indian residents to freely remit up to USD $250,000 per financial year for current or capital account transactions or a combination of both. Any remittance exceeding this limit requires prior permission from the RBI.
- The scheme was introduced by RBI on February 4, 2004.
- Only individual Indian residents, including minors, are permitted to remit funds under LRS.
- Corporates, partnership firms, HUF, trusts, etc., are excluded from its ambit.
- There are no restrictions on the frequency of remittances under LRS.
- Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme.
- Types of transactions permitted:
- Opening of foreign currency accounts abroad with a bank;
- Acquisition of immovable property abroad, overseas direct investment (ODI), and overseas portfolio investment (OPI);
- Extending loans, including loans in Indian Rupees to non-resident Indians (NRIs) who are relatives as defined in the Companies Act, 2013;
- Private visits abroad(excluding Nepal and Bhutan);
- Maintenance of relatives abroad;
- Medical treatment abroad;
- Pursuing studies abroad;