Module: | MODULE A: INTERNATIONAL BANKING
Q57: Consider the following statements regarding Gifts and Donations under the Liberalised Remittance Scheme:
1.
A resident individual is permitted to gift Indian Rupees to a Non-Resident Indian (NRI) relative by crediting the amount to the NRI's Non-Resident Ordinary (NRO) account.
2.
The amount of the Rupee gift credited to an NRO account is included in the resident remitter's LRS limit of USD 250,000.
3.
A resident individual is prohibited from remitting foreign currency as a gift to a person residing outside India who is not a relative.
Which of the statements given above is or are correct?
✅ Correct Answer: Option A
🎯 Quick Answer:
Statements 1 and 2 are correct. Statement 3 is incorrect because foreign currency gifts are permitted to any person.
Concept Definition: Gifts under LRS.The scheme allows residents to transfer wealth voluntarily, subject to limits.Structural Breakdown: Rupee Gift to NRO: A resident can gift Indian Rupees to an NRI relative.This amount must be credited to the NRI's Non-Resident Ordinary (NRO) account.Crucially, this INR amount is converted to USD equivalent for reporting purposes and counts towards the LRS limit of the sender.Foreign Currency Gift: A resident can remit foreign currency as a gift to any person residing outside India.There is no restriction that the recipient must be a relative.This also counts towards the LRS limit.Aggregate Cap: The total of all gifts, along with other remittances (like travel or investment), must not exceed USD 250,000 per financial year. Statements 1 and 2 are correct. Statement 3 is incorrect because foreign currency gifts are permitted to any person.