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Consider the following statements regarding the Liberalised Remittance Scheme (LRS):
1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.
2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.
3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.
Which of the statements given above is/are correct?
1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.
2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.
3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.
Which of the statements given above is/are correct?
- a)1 and 3 only
- b)1 only
- c)2 only
- d)1, 2 and 3 only
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Consider the following statements regarding the Liberalised Remittance...
• Under the Foreign Exchange Management Act (FEMA), 1999, persons resident in India are free to buy or sell foreign exchange for any current account transaction except for those transactions for which drawal of foreign exchange has been prohibited by Central Government, such as remittance out of lottery winnings, remittance for purchase of lottery tickets, banned/proscribed magazines, football pools, sweepstakes, etc.
• The Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI) allows resident individuals to remit a certain amount of money during a financial year to another country for investment and expenditure.
• Liberalised Remittance Scheme (LRS) allows all resident individuals, including minors, to freely remit upto USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc. Hence, statement 1 is not correct.
• Individuals can avail of foreign exchange facility within the LRS limit of USD 2,50,000 in a financial year for different purposes including Private visits to any country (except Nepal and Bhutan), Gift or donation, Going abroad for employment, Emigration, Maintenance of close relatives abroad, Expenses in connection with medical treatment abroad Studies abroad, etc.
• The remittance facility under the Scheme is not available for the following:
(i) Remittance for any purpose specifically prohibited under Schedule-I (like the purchase of lottery tickets/sweepstakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.o Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty.
(ii) Remittance for trading in foreign exchange abroad. Hence, statement 2 is correct.
(iii) Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non- cooperative countries and territories”.
(iv) Remittances directly or indirectly to those individuals and entities identified as posing a significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
• Finance Minister in Budget 2020, introduced new provisions to collect TCS (Tax collected at source) after an internal survey by the income tax department showed that a large number of those sending out money had not filed income tax returns. As per the Budget proposals, TCS will be collected on:
(i) Remittance under the Liberalised Remittance Scheme (LRS) of RBI for an amount exceeding Rs 7Lakh in a financial year.
(ii) Sale of an overseas tour package through a tour operator.
• Authorized dealers (ADs) of foreign exchange (typically banks) will collect this amount. Hence, statement 3 is not correct.
• The Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI) allows resident individuals to remit a certain amount of money during a financial year to another country for investment and expenditure.
• Liberalised Remittance Scheme (LRS) allows all resident individuals, including minors, to freely remit upto USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc. Hence, statement 1 is not correct.
• Individuals can avail of foreign exchange facility within the LRS limit of USD 2,50,000 in a financial year for different purposes including Private visits to any country (except Nepal and Bhutan), Gift or donation, Going abroad for employment, Emigration, Maintenance of close relatives abroad, Expenses in connection with medical treatment abroad Studies abroad, etc.
• The remittance facility under the Scheme is not available for the following:
(i) Remittance for any purpose specifically prohibited under Schedule-I (like the purchase of lottery tickets/sweepstakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.o Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty.
(ii) Remittance for trading in foreign exchange abroad. Hence, statement 2 is correct.
(iii) Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non- cooperative countries and territories”.
(iv) Remittances directly or indirectly to those individuals and entities identified as posing a significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
• Finance Minister in Budget 2020, introduced new provisions to collect TCS (Tax collected at source) after an internal survey by the income tax department showed that a large number of those sending out money had not filed income tax returns. As per the Budget proposals, TCS will be collected on:
(i) Remittance under the Liberalised Remittance Scheme (LRS) of RBI for an amount exceeding Rs 7Lakh in a financial year.
(ii) Sale of an overseas tour package through a tour operator.
• Authorized dealers (ADs) of foreign exchange (typically banks) will collect this amount. Hence, statement 3 is not correct.
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Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer?.
Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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ample number of questions to practice Consider the following statements regarding the Liberalised Remittance Scheme (LRS):1. The Scheme allows all resident individuals, corporates, partnership firms to remit a certain amount of money during a financial year.2. The remittance facility under the Scheme is not available for trading in foreign exchange abroad.3. Recently, the government removed the tax collected at source on LRS to improve ease of doing business.Which of the statements given above is/are correct?a)1 and 3 onlyb)1 onlyc)2 onlyd)1, 2 and 3 onlyCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice UPSC tests.
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