Liberalised Remittances Scheme (LRS) of the RBI

Liberalised Remittances Scheme (LRS) of the RBI : Recently, for the first time since the Covid-19 pandemic disrupted overseas travel and study plans, remittances sent abroad by resident Indians under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS) declined by 6.84%.

o The amount fell to $29.56 billion in the fiscal year 2024-25 (FY25) from $31.74 billion in FY24.

• About LRS: Governed by the Foreign Exchange Management Act (FEMA) 1999 and regulated by the Reserve Bank of India (RBI).

o Launched by RBI in 2004 to facilitate outward remittances by resident individuals from India.

o Remittance Limit: Individuals, including minors, can remit up to USD 250,000 per financial year (April–March) under LRS.

o Permissible Uses: Travel expenses (personal or business) , Medical treatment abroad , Education fees overseas , Gifts and donations , Maintenance of close relatives abroad and Investments in shares, debt instruments, and immovable property overseas

o Individuals may open and maintain foreign currency accounts abroad for transactions allowed under LRS.

o Scheme is not available to corporations, partnership firms, Hindu Undivided Families (HUFs), trusts, or similar entities.