In order to improve the monitoring and ensure compliance with the Liberalised Remittance Scheme (LRS), the Reserve Bank of India (RBI) has tightened norms for LRS by making quoting of permanent account number (PAN) mandatory even for transactions below $25,000. Under the LRS, all resident individuals, including minors, are allowed to freely remit up to $2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.
The RBI highlighted that it has been decided that furnishing of PAN, which hitherto was not to be insisted upon while putting through permissible current account transactions of up to $25,000, shall now be mandatory for making all remittances under LRS.
Further, the Central Bank added that in the context of remittances allowed under LRS for maintenance of close relatives, it has been decided, in consultation with government, to align the definition of relative' with the definition given in Companies Act, 2013 instead of Companies Act, 1956. Earlier, a system for daily reporting of individual transactions under the LRS by banks was been put in place. This system enables the banks to view the remittances already sent by an individual during the financial year.