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…
Read article 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 Release of Foreign Exchange for Non-Trade Current Account Transactions under the Liberalised Remittance Scheme (LRS)
The Liberalised Remittance Scheme (LRS), introduced by the Reserve Bank of India (RBI), permits resident individuals in India to remit up to USD 250,000 per financial year for specified permissible transactions. These remittances may pertain to both current and capital account transactions, or a combination thereof, within the prescribed limit. This article outlines the provisions…
Read article
Electronic Payment Systems in India
An electronic payment sometimes called a digital payment is a good alternative to traditional methods of cash payment and speeds up transaction cycles from person to person, person to business, person to government, Government to person, business to business, business to Government, etc. “Faceless, Paperless, Cashless” is one of the professed roles of the Digital…
Read article Understanding the types of capital account transactions permitted under LRS scheme
Liberalised Remittance Scheme is a scheme introduced by RBI as a liberalization measure to facilitate Resident Individuals (RI) to freely remit funds up to USD 2, 50,000/- outside India in a financial year (April to March) for any permissible current or capital account transaction or a combination of both. The remittances can be made in…
Basic Exchange Rate Arithmetic Explained with Illustrations
IntroductionBasic exchange rate arithmetic involves converting one currency to another using the exchange rate. The fundamental formula for currency conversion is: a × b = cWhere: These transactions occur on the foreign exchange market (Forex market), where foreign currencies and coins are exchanged for the home currency. Exporters and importers needing foreign currency for business…
Read article