Even though domestic consumption, as well as private investment, continue to witness a deep slowdown, the outward flow of money to abroad has gone up. Around 30,000 individuals who remitted money abroad through the Liberalised Remittance Scheme (LRS) are under the Income Tax Department's scanner, reports Business Standard.
According to Business Standard report, I-T Department has sent scrutiny notices to these people, seeking details of the foreign accounts, properties and shares in the relevant company abroad. Most assessees are traders and professionals, and the list is said to include those who sent money abroad for donations.
The Liberalised Remittance Scheme (LRS) is a facility provided by the RBI for all resident individuals including minors to freely remit upto a certain amount in terms of US Dollar for current and capital account purposes or a combination of both. Hence under the LRS, individuals are allowed to spend money in foreign countries for specific purposes like education, tourism, asset purchase etc. The remittance limit is set for a financial year. Regulations for the scheme are provided under the FEMA Act 1999.
Under LRS, remittances can be made for overseas education, travel, medical treatment, apart from maintenance of relatives living abroad, gifting and donations. The money can be remitted for the purchase of shares and property as well. These share and property purchases are the main capital account purposes allowable under the LRS. Individuals can also open, maintain and hold foreign currency accounts with overseas banks for carrying out transactions.
