LRS

April 2025 outward remittances under the RBI's LRS rose 8.6 per cent YoY to $2.5 billion, but full-year outflows fell by 6.85 per cent amid global uncertainty and high base

The central bank is reassessing annual limits, permitted uses, currency options and compliance alignment in its Liberalised Remittance Scheme amid evolving economic realities

Outflows under the scheme were impacted by deposits, maintenance of close relatives, and the international travel segment, among others

The revision, which will be effective from April 1, 2025, is expected to boost travel and foreign exchange segments, provide additional benefits to students, and improve tax compliance

In the September-November quarter of financial year 2025, Indians remitted $7.1 billion overseas, compared to $7.5 billion in the same period last year

Remittances for studies abroad grew marginally to $416.39 million

Investments in equity and debt schemes surged by 108 per cent to $120.86 million from $58.06 million

The Reserve Bank has significantly enhanced the attractiveness and utility of GIFT IFSC by clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, said GIFT City MD and group CEO Tapan Ray on Thursday. GIFT city (Gujarat International Finance Tec-City) located in Gandhinagar has been envisaged as an integrated hub for financial and technology services not just for India but for the world. India's maiden International Financial Services Centre (IFSC) has been set up in GIFT City. The Reserve Bank of India (RBI) on Wednesday issued a circular expanding the scope of norms related to remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS). RBI said it has been decided that "authorised persons" may facilitate remittances for all permissible purposes under LRS to IFSCs for availing financial services or financial products as per the International Financial ...

Last year the government had announced that credit card spends in a foreign currency will be a part of LSR's annual limit of $2,50,000

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Two British banks, one Swiss bank and a leading Emirates lender have closed the accounts of these Indians in the last two months

Travellers may split forex purchases, use international cards on foreign sites, and book various elements of the trip separately

According to the latest RBI data, the amount remitted under LRS stood at $9.1 billion in Q1FY24, compared with $6.05 billion in the same quarter last year

TCS on LRS will also apply to remote education and medical consultancy

The tax department will soon come out with a clarification in the form of FAQs to distinguish between expenses incurred on personal visits and business trips for levy of 20 per cent TCS on overseas credit card spends from July 1, a senior official said on Friday. Following a notification which brought credit card spends under LRS, concerns have been raised on how personal and business expenses would be segregated by the banks who will be required to deduct the TCS on such expenses. Finance ministry joint secretary (Tax Policy and Legislation) Raman Chopra said the government would soon issue a clarification on the mode of applicability of the TCS provision. "There has been a lot of discussion with the finance secretary, the revenue secretary and the finance minister. We are certainly going to come up with some clarifications and FAQs on that and that will clarify the position beyond any reasonable doubt in what manner TCS is to be collected and to what extent threshold is available

These transactions will not attract tax collected at source

New rules on remittances may rein in legal transfers

Further, in April 2022-February 2023, outward remittances under LRS stood at $24.18 billion, an all-time high

Before this, the highest spend on overseas travel in an entire financial year was $7 billion in 2019-20

In FY22, outflows under the LRS scheme at $19.61 billion was an all-time high