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Liberalised Remittance scheme: UPSC Daily Important Topic | 23 March 2023

Liberalised Remittance scheme

✅Under LRS (introduced in 2004), Indian individuals can send money outside up to a maximum of $250,000 in a year.

✅Aim: 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.

✅Benefits of LRS: Individuals can diversify their investments and assets, and also provides an opportunity to finance their foreign education or travel.

✅Issues: Outward remittances can add pressure to the forex reserves of the country and therefore the government has proposed a 20% Tax Collection at Source (TCS) for any foreign remittance transactions in FY24.

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