The problems of inadequate funds are often faced by the people or businessmen who are residing abroad and they need funds for education or business purpose. So, to solve all the hassle of foreign exchange transfer RBI(Reserve Bank of India) has introduced the LRS(Liberalised Remittance Scheme) for the smooth flow of capital overseas. This LRS scheme of RBI resulted in smooth foreign transactions and exchanges.
If you want to know detailed information about the RBI liberalised remittance scheme make sure to stay till the end of the article where we’ll be highlighting the key concept of LRS
LRS stands for Liberalised Remittance Scheme and it is a foreign exchange policy introduced by the Reserve Bank of India for the smooth flow of foreign transactions. The scheme is intended to streamline and simplify the process of transacting funds outside of India. This scheme helps India to overcome the international funds restriction imposed by the Foreign Exchange Management Act. Now, with the help of the RBI Liberalised Remittance Scheme any individual residing in India can actively participate in the foreign exchange transaction and release their funds abroad. However, RBI imposes certain limits on the transfer of funds involving a current or capital account. The limits of funds imposed by RBI follow differently to the different industries.
There are notable benefits of the Liberalised Remittance Scheme introduced by RBI. Some of the potential benefits are highlighted below.
If you are a student residing outside of India and your parents are willing to transfer funds for your education purpose. Then with the help of the Liberalised Remittance Scheme, an individual has permission to remit money for education expenses such as tuition fees, living expenses, and books. This scheme enables students to pursue higher education in foreign universities or colleges.
The Liberalised Remittance Scheme allows an individual to diversify their investment portfolio by investing in different foreign assets. A few years back, investment in foreign assets was almost a difficult task for the individual but when the RBI Liberalised Remittance Scheme came into effect foreign investment became easy.
The LRS enables individuals to remit money for their medical treatment heading outside of India. The scheme is very helpful for those who want to go abroad for treatment which is unavailable in India. Now, with the help of the LRS transferring funds to a foreign country for medical purposes is very easy so that every needy individual can actively go for foreign treatment.
The Liberalised Remittance Scheme enables the individual to exempt money for all overseas travel-related expenses including ticket, hotel bookings, and all other travelling expenses. However, there are certain guidelines for the remittance. Any individual including minors can remit up to USD 250,000 per financial year.
Start-ups and businesses are the backbone of the country and if it is accelerated then the entire economy of the country can be accelerated. Any start-up business requires investment whether it is in-country or out-country investment. So, with the help of the Liberalised Remittance Scheme, any individual can invest in foreign businesses, startups, and joint ventures, They can also seek money to expand their business globally.
The Liberalised Remittance Scheme has significantly paved the way for international trade, foreign investment, and much more. The LRS introduced by RBI possesses many benefits some of which are highlighted above in the article. However, RBI imposes certain eligibility criteria and documentation for hassle-free transactions. If you want to know more about the RBI, the Liberalised Remittance Scheme must consult CA. Manoj K Pahwa provides complete details on the RBI Liberalised Remittance Scheme. CA. Manoj K Pahwa, the top FEMA consultant in Delhi with a highly dexterous team can effectively address all your queries.