{"id":2943,"date":"2026-01-23T12:51:55","date_gmt":"2026-01-23T07:21:55","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=2943"},"modified":"2026-01-23T16:00:23","modified_gmt":"2026-01-23T10:30:23","slug":"what-is-the-liberalised-remittance-scheme-lrs","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-the-liberalised-remittance-scheme-lrs\/","title":{"rendered":"Liberalised Remittances Scheme (LRS)"},"content":{"rendered":"<h2><b>Liberalised Remittances Scheme (LRS) Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Analysis of data on the outward remittances under the RBI\u2019s Liberalised Remittances Scheme (LRS) shows that the amount of money sent or spent abroad by Indians fell to a two-year low of $1.94 billion in November 2025, pulled down in large part by a sharp dip in the amount spent on foreign studies.<\/span><\/p>\n<h2><b>About Liberalised Remittances Scheme (LRS)<\/b><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">It is <\/span><b>part of the Foreign Exchange Management Act (FEMA) 1999,<\/b><span style=\"font-weight: 400;\"> which lays down the guidelines for outward remittance from India.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Under LRS<\/b><span style=\"font-weight: 400;\">, <\/span><b>all resident individuals, including minors<\/b><span style=\"font-weight: 400;\">, are allowed to <\/span><b>freely remit up to USD $250,000 per financial year<\/b><span style=\"font-weight: 400;\"> (April\u2013March).\u00a0<\/span>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">This can be for any <\/span><b>permissible current or capital account transaction,<\/b><span style=\"font-weight: 400;\"> or a<\/span><b> combination of both.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Any <\/span><b>remittance exceeding this limit requires prior permission from the RBI.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The scheme was <\/span><b>introduced <\/b><span style=\"font-weight: 400;\">on February 4, <\/span><b>2004<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Who can remit funds under <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/what-is-liberalised-remittance-scheme-lrs\/\" target=\"_blank\">LRS<\/a>?<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>Only individual Indian residents, including minors, <\/b><span style=\"font-weight: 400;\">are permitted to remit funds under LRS.<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Corporates, partnership firms, Hindu Undivided Family (HUF), trusts, <\/b><span style=\"font-weight: 400;\">etc., are <\/span><b>excluded <\/b><span style=\"font-weight: 400;\">from its ambit.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Frequency of Remittances:<\/b>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">There is <\/span><b>no restriction on the frequency<\/b><span style=\"font-weight: 400;\"> or number of <\/span><b>transactions <\/b><span style=\"font-weight: 400;\">during a financial year.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">However, the <\/span><b>total amount<\/b><span style=\"font-weight: 400;\"> of foreign exchange remitted through all sources in India <\/span><b>under LRS during the current FY<\/b><span style=\"font-weight: 400;\"> should be within the LRS limit as specified by the RBI, i.e.,<\/span><b> USD $250,000.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Types of transactions permitted:<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>Opening of a foreign currency account abroad <\/b><span style=\"font-weight: 400;\">with a bank;<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Acquisition of immovable property <\/b><span style=\"font-weight: 400;\">abroad,<\/span><b> overseas direct investment<\/b><span style=\"font-weight: 400;\"> (ODI), and <\/span><b>overseas portfolio investment <\/b><span style=\"font-weight: 400;\">(OPI);<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Extending loans, <\/b><span style=\"font-weight: 400;\">including loans in Indian Rupees <\/span><b>to non-resident Indians (NRIs) who are relatives <\/b><span style=\"font-weight: 400;\">as defined in the Companies Act, 2013;<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Private visits abroad<\/b><span style=\"font-weight: 400;\"> (excluding Nepal and Bhutan);\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Maintenance of relatives abroad;<\/b><\/li>\n<li style=\"text-align: justify;\"><b>Medical treatment abroad;<\/b><\/li>\n<li style=\"text-align: justify;\"><b>Pursuing studies<\/b><span style=\"font-weight: 400;\"> abroad;<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Any other current account transaction that does not fall under the definition of current account (FEMA 199);<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Types of transactions not permitted:\u00a0<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>Remittance for purposes specifically prohibited<\/b><span style=\"font-weight: 400;\">, such as <\/span><b>buying lottery tickets<\/b><span style=\"font-weight: 400;\"> or restricted items.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Sending money from India<\/span><b> for margins or margin calls to overseas exchanges<\/b><span style=\"font-weight: 400;\"> or parties.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Remittance for <\/span><b>buying Foreign Currency Convertible Bonds (FCCBs) issued by Indian companies<\/b><span style=\"font-weight: 400;\"> in the overseas secondary market.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Sending money <\/span><b>for trading in foreign exchange abroad.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Sending <\/span><b>money to individuals<\/b><span style=\"font-weight: 400;\"> and entities identified as posing a significant <\/span><b>risk of terrorism.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Sending money <\/span><b>to countries identified as \u201cnon-cooperative countries<\/b><span style=\"font-weight: 400;\"> and territories<\/span><b>\u201d by the Financial Action Task Force (FATF).<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Tax Imposed on LRS:<\/b>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Tax Collected at Source (<\/span><b>TCS<\/b><span style=\"font-weight: 400;\">)<\/span><b> applies to LRS transactions exceeding INR 7 lakh<\/b><span style=\"font-weight: 400;\"> in a financial year.<\/span>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Current TCS rates are 2<\/span><b>0% for general remittances <\/b><span style=\"font-weight: 400;\">and may vary based on the purpose and the total amount remitted.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Any profit made<\/b><span style=\"font-weight: 400;\"> from abroad <\/span><b>investments under LRS <\/b><span style=\"font-weight: 400;\">is <\/span><b>subject to tax in India <\/b><span style=\"font-weight: 400;\">depending on the holding period. <\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Source: <a href=\"https:\/\/www.thehindu.com\/business\/spending-abroad-by-indians-falls-to-two-year-low-as-foreign-education-outgo-plummets\/article70537083.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under Liberalised Remittances Scheme (LRS), all resident individuals, including minors, are allowed to freely remit up to USD $250,000 per financial year (April\u2013March). Read more about Liberalised Remittances Scheme (LRS), Types of Transactions, Latest News.<\/p>\n","protected":false},"author":5,"featured_media":83898,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[4903,21,22,23],"class_list":{"0":"post-2943","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-liberalised-remittances-scheme-lrs","9":"tag-prelims-pointers","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=2943"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2943\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/83898"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=2943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=2943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=2943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}