Module: | MODULE A: INTERNATIONAL BANKING
Q71: Consider the following statements regarding the Student Residency status and LRS:
1. A student going abroad for higher studies is treated as a Non-Resident (NRI) for banking purposes under FEMA.
2. Despite the Non-Resident status of the student, the parents in India can continue to remit funds to them under the Liberalised Remittance Scheme.
3. The student is permitted to receive remittances from parents but is prohibited from working or earning income abroad.
Which of the statements given above is or are correct?
2. Despite the Non-Resident status of the student, the parents in India can continue to remit funds to them under the Liberalised Remittance Scheme.
3. The student is permitted to receive remittances from parents but is prohibited from working or earning income abroad.
Which of the statements given above is or are correct?
✅ Correct Answer: B
🎯 Quick Answer:
Statements 1 and 2 are correct. Statement 3 is incorrect.A student leaving for a course (duration greater than 6 months) indicates an intent to stay uncertainly; thus, they become Non-Residents (NRI) immediately upon departure.
They can open NRE or NRO accounts in India.
LRS Link: Even though the student is an NRI, the LRS facility is available to the Parents (who are Residents). The parents use their own LRS limit to send maintenance or fees to the student.
Earnings: Students are generally permitted to work (on-campus jobs, internships, etc.) subject to the visa rules of the host country.
FEMA does not prohibit them from earning abroad.