Reporting Requirements under the Liberalised Remittance Scheme (LRS)
Under the Liberalised Remittance Scheme (LRS), resident individuals are permitted to remit up to USD 250,000 per financial year for a wide range of permissible current and capital account transactions. In order to ensure transparency and regulatory compliance, the scheme imposes specific reporting and documentation obligations on both remitters and Authorised Dealer (AD) banks. 1.…
Read article
Look up facility for RTGS and NEFT services from April 2025
The Reserve Bank of India (RBI) has mandated the implementation of a beneficiary account name verification system for fund transfers via Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services by April 2025. Currently, payment systems such as the Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) allow remitters to verify the…
Read article
Liberalised Remittance Scheme (LRS) in the Context of Capital Account Transactions under FEMA
Under the Foreign Exchange Management Act (FEMA), 1999, all foreign exchange transactions are broadly classified as either current account or capital account transactions, depending on whether they result in a change in assets or liabilities of a person resident in India vis-à-vis the rest of the world. The Liberalised Remittance Scheme (LRS), introduced by the…
Read article
Remittances under LRS for Current Account Transactions – Tax Collected at Source (TCS)
The Liberalised Remittance Scheme (LRS), introduced by the Reserve Bank of India (RBI), enables resident individuals to remit up to USD 250,000 per financial year for specified permissible transactions. This includes both current and capital account transactions, provided the remittances comply with the terms and conditions stipulated by the regulatory authorities. Key Aspects of LRS…
Read article Key Provisions under FEMA in Relation to the Liberalised Remittance Scheme (LRS): Permissible and Non-Permissible Remittances
Overview of FEMA, 1999 The Foreign Exchange Management Act (FEMA), 1999, governs the management of foreign exchange transactions in India. Under FEMA, transactions are broadly classified into current account transactions and capital account transactions. Current account transactions refer to transactions that do not alter the assets or liabilities of a person resident in India or…
Understanding Capital Account Transactions and Current Account Transactions
Current account transactions and capital account transactions are the two main components of a country’s balance of payments, reflecting different types of financial interactions with the rest of the world. Current account transactions involve the flow of goods, services, income, and current transfers, while capital account transactions involve the flow of financial assets, like investments…
Read article