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Liberalised Remittance Scheme For NRI (LRS)

By Hemant Beniwal

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Planning is bringing the future into the present so that you can do something about it NOW.

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I keep getting questions on RBI’s LRS Scheme & is Liberalised Remittance Scheme available for NRI.

So in this post, I have touched what is LRS, purpose, how much money can be remitted, requirements & a few other important questions.

What is LRS Scheme?

The Liberalised Remittance Scheme (LRS) is a facility provided by the RBI that allows resident Indians to remit a certain amount of money during a financial year to another country. The amount can be used for investment and expenditure.

Liberalized Remittance Scheme

When was liberalised remittance scheme introduced?

LRS was introduced in 2004 & at that time limit was just $25000. The limit is substantially increased over a period of time.

How much money can be remitted and what is the allowed frequency of transactions?

Resident individuals can remit up to $250,000 per financial year. This can be done in any number of transactions as long as the total amount does not exceed the limit. They can use the amount for both current account and capital account transactions.

Read About – How can NRIs transfer Funds to India from Overseas.

What purposes can the money remitted be used for?

The money can be used for different purposes such as –

  • Education abroad
  • Gifts
  • Donations
  • Maintenance expenses of close relatives abroad
  • Investment in equity, debt, or property abroad that follows prescribed regulations.
  • Travel for business, conference or training
  • Travel and expenditure for medical reasons for self
  • Travel as a companion for a person who is going abroad for medical treatment
  • Emigration purposes
  • Provide loan to a close relative who is an NRI as long as no interest is charged, and the loan is at least for a year.

“Under LRS Indian Resident Parents can gift money to their kids who are NRI/OCI/PIO.” wiseNRI

Are there any restrictions on the usage of the money remitted?

Some transactions are not allowed under the LRS scheme –

  • Buying and selling of foreign exchange abroad
  • Purchase of lottery tickets or sweepstakes
  • A gift from one Indian resident to another Indian resident, in foreign currency to be credited in the account held abroad under LRS
  • Some types of income are not allowed to be transferred abroad, and there are restrictions on remitting money to certain countries.
  • The LRS scheme is not available to the Association of Persons, Body of Individuals, Company, HUF, LLP, Partnership Firm, Society, and Trust.

Read – Best time to send money to India

Should the resident individuals repatriate the accrued interest/dividend on deposits/investments abroad, over and above the principal amount?

The investor can retain and reinvest the income earned from portfolio investments made under the LRS.

What are the requirements to make a remittance under the LRS?

The individual will require PAN and KYC completed. The individual should have maintained an account with the bank through which the remittances will take place for at least a year. The bank should conduct the necessary due diligence for opening, maintenance, and operation of the account.

What currency can I use?

Any freely convertible foreign currency can be used in this scheme.

liberalised remittance scheme for nri

Liberalised remittance scheme for non residents?

Can NRIs use this scheme via their bank accounts in India?

The LRS scheme strictly applies to Indian residents only. NRIs will not have any resident savings accounts. They will have NRE, NRO or FCNR accounts only. They can remit amounts abroad from NRO, NRE and FCNR accounts subject to rules and requisite documentation –

  • They can remit up to US$ 10,00,000 from an NRO account
  • There are no restrictions on remittance from an NRE or FCNR account

The Liberalised Remittance Scheme has helped Indian residents manage monetary transactions abroad that have made their lives easier. The money can be used for medical expenses, education, and other purposes. It is also a great way to diversify your investment portfolio as you can invest outside India as well.

Must Read – Outward Remittance – How can NRIs transfer funds overseas from India

Hope this article cleared your doubts regarding liberalised remittance scheme for NRI. If you still have any questions – use the comment section.

Liberalized Remittance Scheme
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Hemant Beniwal


Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

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