Concerned over funds sent abroad under the maintenance of close relative category of the LRS, the RBI has narrowed the definition of relatives to check the flow of funds. LRS stands for

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Concerned over funds sent abroad under the ‘maintenance of close relative’ category of the LRS, the RBI has narrowed the definition of relatives to check the flow of funds. LRS stands for

A	Logical Remittance Scheme
B	Liberalised Remittance Scheme
C	Liberalised Remittance System
D	Liberalised Remittance Service

Explanation:

Detailed explanation-1: -There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2, 50, 000.

Detailed explanation-2: -Maintenance of close relatives abroad – A resident individual can remit up-to USD 2, 50, 000 per FY towards maintenance of close relatives [’relative’ as defined in Section 2(77) of the Companies Act, 2013] abroad.

Detailed explanation-3: -Who can remit funds using LRS? Only individual Indian residents are permitted to remit funds under LRS. Corporates, partnership firms, HUF, trusts, etc are excluded from its ambit.

Detailed explanation-4: -Remittance facility under the scheme is prohibited for the following transactions: 1. Capital Account Transactions – Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non cooperative countries or territories” from time to time.

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