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?
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: A
🎯 Quick Answer:
Statements 1 and 2 are correct. Statement 3 is incorrect because foreign currency gifts are permitted to any person.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.