LIBERALISED REMITTANCE SCHEMES ALLOWS INDIANS TO INVEST ABROAD.
Under the Liberalised Remittance Scheme, remittances by resident individuals up to USD 2,50,000 per Financial Year (April-March) are permitted by resident Indians.
This Scheme is not available to corporates, partnership firms, HUF, Trusts, etc.
ThIs Scheme is available to all resident individuals including minors.
Remittances under the Scheme can be consolidated in respect of family members subject to individual family members complying with its terms and conditions.
However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not the co-owners/co-partners of the overseas bank account/ investment/property.
Further, a resident cannot gift to another resident, in foreign currency, for the credit of the latter’s foreign currency account held abroad under LRS.
The permissible capital account transactions by an individual under LRS are:
- opening of foreign currency account abroad with a bank;
- purchase of property abroad;
- making investments abroad- acquisition and holding shares of both listed and unlisted overseas company or debt instruments,
- nvestment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes;
- setting up Wholly Owned Subsidiaries and Joint Venturesoutside India for bonafide business subject to the terms & conditions stipulated.
- extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives.TO KNOW MORE PLEASE READ THE RELEVANT RBI GUIDELINE (link below)
