Liberalised Remittance Scheme (LRS) for Resident Individuals- Discontinuation of Reporting of monthly return

Current Context: The Liberalised Remittance Scheme (LRS) is a scheme introduced by the Reserve Bank of India (RBI) that allows resident individuals to remit foreign currency up to a certain limit without prior approval from the RBI.

• This limit is currently set at $250,000 per financial year.
• Before April 1, 2020, resident individuals were required to report their monthly remittances under the LRS to the Authorized Dealer (AD) banks.
• This reporting requirement was aimed at monitoring the utilization of the LRS and preventing its misuse.
• However, effective April 1, 2020, the RBI discontinued the requirement for resident individuals to submit monthly returns for their LRS remittances.
• This change was introduced to simplify the process for individuals and reduce the administrative burden on banks.
• Key points to remember:
• The LRS limit remains unchanged at $250,000 per financial year.
• Resident individuals are no longer required to submit monthly returns for their LRS remittances.
• The discontinuation of monthly reporting does not affect the overall LRS framework.

Question:

1 What is the current limit for foreign currency remittances under the Liberalised Remittance Scheme (LRS) per financial year?

• A) $250,000
• B) $500,000
• C) $150,000
• D) $100,000

Answer: A) The RBI allows resident individuals to remit up to $250,000 per financial year under the LRS without prior approval.