CORE MEANING, REMITTANCES TO NON-RESIDENTS AND TAX DEDUCTION, . REPATRIATION OF INCOME AND SALE PROCEEDS OF ASSETS, RETENTION AND REINVESTMENT OF INCOME EARNED ABROAD
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Foreign Exchange Facilities for Individuals — Foreign Exchange Facilities for Individuals.
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What is the Liberalised Remittance Scheme (LRS) and who is eligible to use it?
LRS is a facility under FEMA that allows resident individuals (including minors) to remit up to USD 2,50,000 per financial year for permitted current and capital account transactions. It is not available to corporates, partnership firms, HUFs, or trusts.
What does the term 'remittance' mean in the context of foreign exchange regulations?
Transfer of money from one country to another country.
What is the annual remittance limit under the Liberalised Remittance Scheme (LRS)?
Resident individuals can remit up to USD 2,50,000 per financial year (April–March) under LRS without prior RBI approval. This limit is cumulative across all permitted purposes.
What is the meaning of 'Non-Resident' under FEMA for remittance purposes?
A person not residing in India as per FEMA definition.
Under LRS, can a minor remit funds abroad for education?
Yes, a minor resident individual can remit funds under LRS, provided the remittance is made by the natural guardian on the minor's behalf and the purpose is a permitted one such as overseas education.
Which FEMA account is used by NRIs to receive remittances from abroad in Indian rupees?
Non-Resident External (NRE) account in Indian rupees.
What is the Tax Collection at Source (TCS) rate applicable on remittances under LRS exceeding Rs. 7 lakh in a financial year?
TCS at 20% is levied on LRS remittances exceeding Rs. 7 lakh per financial year from October 2023 onwards, except for education and medical treatment purposes where lower rates apply.
What is the full form of NRO account used by non-residents in India?
Non-Resident Ordinary account denominated in Indian rupees.
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