Here's everything you need to know about the RBI's Liberalised Remittance Scheme

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Subscribe to enjoy similar stories. The Reserve Bank of India’s (RBI’s) Liberalised Remittance Scheme (LRS) allows resident Indians to send money abroad for various purposes. However, the scheme has various dos and don'ts as it involves foreign exchange.

Here's everything you need to know about it. LRS allows Indians to invest in listed foreign securities – both equity and debt. You can invest in mutual funds, exchange traded funds (ETFs), venture funds, and real estate (with some caveats).

You can also invest in listed debt securities such as bonds, but not unlisted debt. "For example, you can invest in bond ETFs but not US Treasury bills since they are unlisted," said Harshal Bhuta, partner at chartered accountancy firm PR Bhuta & Co. Also read: Your credit card has been compromised.

What should you do next? You can’tuse it to buy physical gold or gold bonds outside India either, though you can import gold through LRS. Also, investing in derivatives listed on overseas exchanges is not allowed. You can use your LRS quota for foreign trips, including business travel.

You can also use it if you are moving overseas for a job, or to send money to close relatives who are non-resident Indians (NRIs). Other uses include medical treatment and studying abroad. What you can’t do is create leverage in foreign currency in a foreign bank.

While you can technically use it buy an under-construction property abroad, you need to be careful as the RBI may see it as a violation if the value of the construction work exceeds the LRS payment. You can't use to it put money in a bank fixed deposit abroad owing to a lack of clarity. "It appears that investment in fixed deposits offshore is not specified in the list of permitted investments.