What is LRS: Liberalised Remittance Scheme?| North Loop Official Blog
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15 Dec 2019

What is LRS: Liberalised Remittance Scheme?

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For our Indian users:
Every country has its rules for sending and receiving money from abroad (also known as remittances). Due to economic, political and social factors, countries vary in how much a person can send abroad as well as for what purposes and the documentation needed.
In India, the Foreign Exchange Management Act (FEMA) controls the inward and outward flow of money. Within the Liberalized Remittance Scheme (LRS), there are limits to how much money Indian residents can send out of the money every financial year (April 1st - March 31st). The annual limit is US $250,000 (or equivalent in other currencies).
You can send remittances under the LRS if they fall under the following schemes:
  • Paying for overseas education
  • Travel and tourism costs
  • Medical treatment abroad
  • Emigration purposes
  • Gifts and donations to eligible beneficiaries
  • Going abroad for employment
  • Business trip to a foreign country

What types of remittance are prohibited?

Under the LRS, there are certain types of remittance which are not allowed.
If you want to remit over USD 250,000 in one financial year, you must get special permission from the RBI (Reserve Bank of India). There are also some countries and organisations you’re not allowed to remit money to.
On top of this, the RBI, you can’t remit money which originates from certain sources including.
  • Lottery winnings or earnings from gambling
  • Certain company dividends
  • Interest payments on some non-resident rupee bank accounts
  • Certain types of income

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Impact of the Liberalized Remittance Scheme (LRS)i

With the LRS, it became much easier for Indians able to start sending money abroad. This is particularly true for Indian students studying abroad -both education and living expense became easier to pay for, helping India become one of the largest international student sources in the world, with 1 million Indian students studying abroad.
Don’t forget to fill in the needed documentation when sending money overseas.

Does LR apply to Non-Resident Indians (NRI)?

The LRS is meant for resident individuals in India only.
As a non-resident Indian (NRI), you can hold a bank account in India in one of the following categories:

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.