Consider the following statements regarding the Liberalised Remittance Scheme (LRS):
1. Remittance for trading in foreign exchange abroad is permitted under the scheme.
2. Acquisition of immovable property abroad is an allowed transaction under the scheme.
3. Charitable trusts can utilize the scheme to send assistance abroad.
How many of the statements given above are correct?
Only Two
Incorrect AnswerAll Three
Incorrect AnswerExplanation:
The Liberalised Remittance Scheme (LRS) was introduced by the Reserve Bank of India (RBI) to facilitate residents to remit funds abroad for permitted current or capital account transactions or a combination of both. Here's a breakdown of the statements:
Remittance for trading in foreign exchange abroad is not permitted under the LRS. Individuals cannot use LRS to trade in foreign exchange, including binary options and margin trading, which are highly speculative.
Acquisition of immovable property abroad is a permitted transaction under LRS. Residents can use LRS to purchase immovable property outside India.
Charitable trusts, NGOs, and other similar institutions cannot utilize the LRS to send assistance abroad. The LRS is specifically for resident individuals.
Thus, only statement 2 is correct.
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By: Parvesh Mehta