what is liberalised remittance scheme

The Liberalised Remittance Scheme (LRS) is a foreign exchange policy initiative introduced by the Reserve Bank of India in 2004. Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The LRS includes a comprehensive list of reasons for which you can remit funds, such as international trade, foreign investment, and transfer of money for educational and medical aid to family members residing abroad. The scheme allows you to diversify your investment portfolio, buy foreign products, and more. However, there are certain restrictions on the remittance facility under the scheme, such as remittance for any purpose specifically prohibited under Schedule-I or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000. The current limit for Liberalised Remittance Scheme is USD 250,000 for a given financial year, and you can remit a higher amount after taking prior permission from the Reserve Bank of India. The LRS is only for resident individuals and cannot be used by corporations, partnership firms, Hindu Undivided Family (HUF), trusts, etc.