Under the Reserve Bank of India's Liberalised Remittance Scheme (LRS) referenced in Chapter 2.8 & 20.3, what is the maximum foreign exchange amount an individual resident Indian can remit abroad per financial year for permissible capital/current account transactions (including overseas life insurance premiums)?

[ A ]USD 250,000[ CORRECT ]

[ B ]USD 50,000

[ C ]USD 100,000

[ D ]USD 1,000,000

Takeaway

Under RBI's Liberalised Remittance Scheme, the maximum a resident individual can remit abroad per financial year for permissible transactions is USD 250,000, so option A is correct.

Derivation

The LRS annual limit of USD 250,000 per financial year (April-March) covers permissible current and capital account transactions for resident individuals, including maintaining foreign insurance policies, education, travel, and overseas investments — directly relevant to how the Guptas can continue servicing their US life insurance premiums from India. This is a fact-recall question testing whether candidates know the current limit rather than an outdated historical ceiling, since the LRS cap has been revised upward multiple times since the scheme's introduction.

Why the others fail

B — USD 50,000

USD 50,000 was the historical LRS limit applicable in the scheme's early years in the early 2000s, not the current ceiling.

C — USD 100,000

USD 100,000 was the LRS limit that applied prior to the 2013-14 revision, not the current, higher ceiling.

D — USD 1,000,000

USD 1,000,000 is the annual repatriation ceiling under the general NRE/NRO account route for NRIs, not the resident individual's LRS scheme limit.