LRS Scheme (Liberalized Remittance Scheme)

The Reserve Bank of India launched the Liberalized Remittance Scheme. RBI grants the occupant individuals to send the assured sum of money in a financial year to other countries for expenditure and investment. According to the rules and regulations, the resident individuals might have to pay up to two-fifty thousand dollars for each financial year. The money will be used to pay the costs of traveling, health treatment, gifts, donations, studying, and the maintenance cost of the relatives as well.

Except for this, the paid amount is also allowed to be spent in shares, debts, insurances and to purchase inflexible properties in the market abroad. The individuals are allowed to hold, open, and preserve accounts for foreign currency in the banks outside of India for regulating the transactions allowed under the scheme.

Coverage under LRS Scheme

The remitted amount can be used for the following only:

  • Costs relating to travel, health treatment, donations, gifts, study, maintenance charge of relatives, etc.
  • For shares investment, and for purchasing permanent properties in the market abroad.
  • The individuals can also preserve, open, and hold foreign currency accounts in banks outside of India for several transactions allowed under the scheme.

What not Covered?

The remitted amount is not available for the following activities:

  • Allowance for any intention forbidden under Schedule-I, such as buying lottery tickets, sweepstakes, restricted magazines, or any product that is restricted under the Schedule II by Foreign Exchange Management.
  • Allowance from India for the margin calls or margin for exchanges abroad.
  • Allowance to buy from FCBs given out by Indian Companies at the secondary markets abroad.
  • Allowance for trading overseas foreign exchange.
  • Capital amount allowance either directly or indirectly for the countries recognized by the FATF or Financial Action task force as the "non-cooperative countries and territories from time to time.
  • Allowance of directly or indirectly to those persons or entities who are recognized as the pretense significant risks of committing acts such as terrorism as directed independently by the Reserve Bank of India.

Allowed Transactions

The following transactions are allowed for the following purposes under the given amount under the scheme:

Business Trips

As per the scheme, the business trips are allowed for the individuals who will be attending international conferences, apprentice training, specialized training, etc. are counted as the business visits. Travelling for foreign countries, the individuals are allowed to avail of the foreign exchange up to $250. But if a company or entity is sending the individual, then the expenses will be borne by the latter; these costs will be counted as the enduring current account transactions under the scheme. 

Private visits

All the expenses relating to the travel along with the cost of road/rail/ water transportation etc. with the expenses of lodges or hotels will be included under the LRS limit. According to the above regulations, the individual is supposed to spend five percent of the TCS by the Authorized Dealers, the Private Dealers, Banks, while the purchase in Foreign Exchange. Plus, when the similar amount is used to pay for the tour operator, there will be mostly TCS as the Tour operator.

Investment Abroad

The TCS is valid if the individual invests overseas under this scheme. But if an entity invests as per the ODI scheme with the 400% of the net worth of business, then TCS will not be applicable.

Other transactions allowed in the scheme are:

  • Emigration
  • Private visits to any country
  • Travelling abroad for employment
  • Donation or Gifts
  • Maintenance cost for close relatives
  • Travelling for conferences, business, specialized training, expenses of the medical costs, check-ups.


 The individuals must have a Permanent Account Number (PAN).

The payments for various purposes will be made by the credit cards and the other transaction methods such as Paytm, UPI, and PayPal. Plus, the transactions can be done in Indian rupees or as per the foreign exchange. The intermediaries and the credit card banks are supposed to be the authorized dealer for the scheme. The rules and regulations are equally applicable for the buyers to ensure TCS is made via the credit card banks or the intermediaries.

You will be able to find more details about this scheme on the RBI official page for LRS scheme.

Frequently Asked Questions

Q. What is the Liberalised Remittance scheme?

The Reserve Bank of India launches the Liberalized Remittance Scheme. RBI grants the occupant individuals to send the assured sum of money in a financial year to other countries for expenditure and investment.

Q. When was this scheme launched?

This scheme was launched on 4 February 2004.

Q. Are there any limitations on the frequency of remittance?

No, there are no limitations on the frequency remittances under the scheme. But the total sum of foreign exchange bought from India's sources in a single financial year must be under the increased limit of US Dollar of 250000. However, if the limited amount of 250,000 dollars is used in a year, then the resident individual won't be allowed to make any further transactions. 

Q. Is there any limitation on the kind and type of investment someone can make?

No, there are no guidelines provided under the Liberalised Remittance Scheme for making any investment. But the investor is supposed to make precise and diligent decisions while making decisions before investing.

Q. Is it mandatory for individuals to have a PAN Card?

Yes, the individuals must have the Permanent Account Number for all the transactions under this scheme.

Q. Is there any provision for a family member or relative to use the remittances under this scheme?

Yes, the remittances can be used by the family members or close relatives as per the regulations prescribed under the scheme. But clubbing is not allowed for the other family members for capital account transactions like opening an account or any investment or purchase of properties if they are not the partners of the overseas bank account. However, a resident can not give the amount to another resident in foreign currency. 

Q. Can the remittances be made in USD?

Yes, the remittances can be made in any foreign currency.

Q. Can bankers open foreign currency accounts in India?

No, the bankers can't open foreign currency accounts in India for the residents.