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.