What is Liberalized Remittance Scheme (LRS)?

The rules around sending and receiving money from overseas vary all around the world. In India, the Foreign Exchange Management Act (FEMA) is used to control the flow of money in and out of the country - and the Liberalized Remittance Scheme (LRS) is specifically used to manage transfers in which currency moves from India to other countries¹. There are limits and rules in place, which you need to understand if you want to remit money overseas from India.

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At Kalhatti we work within all legal frameworks. That brings us to: the Liberalized Remittance Scheme (LRS).

What is LRS?

One of the roles of the Reserve Bank of India (RBI), India’s central bank, is managing the flow of money in and out of the country, under what’s known as the Foreign Exchange Management Act (FEMA).

Some of the reasons for these controls are:

  • The government must make sure that money being sent into or out of the country does not  come from crime, or end up being used for something illegal such as funding terrorism¹

  • The government must make sure that India’s foreign exchange market develops in an orderly fashion and hence controls and limits the flow of money out of India

The Liberalized Remittance Scheme (LRS)

A remittance is basically any money sent overseas by an individual. The Liberalized Remittance Scheme (LRS) is a facility provided by  RBI for all resident individuals to freely remit up to a certain amount of money for current and capital account purposes or a combination of both. The LRS deals with outward remittances only.

Under the LRS, resident individuals can send money abroad for a number of purposes, up to a maximum annual limit which runs between April- March of the financial year. Currently that limit is a maximum of USD 250,000. More information can be found here RBI-LRS.

How does LRS work?

Remittances are only allowed through authorized players due to monitoring requirements and currency exchange procedures and with appropriate paperwork and identification. You can remit through your bank. We help you through the process via the app.