We are unlisted public ltd co have a wholly owned subsidiary in Mauritius. In view of pending APR Returns to RBI, company is barred from remitting Money to WOS. Ours is family owned company and daughter of promoter cum director privately remit under LRS. How to show this account Entry in books of accounts.
Accounting for Private Remittance under LRS To record the private remittance under the Liberalized Remittance Scheme (LRS) in the books of accounts: -
*Separate accounting*: Maintain separate records for the private remittance, distinct from the company's transactions. -
*Documentation*: Ensure proper documentation, including proof of remittance and purpose of the remittance. -
*Accounting entry*: Record the remittance as a personal transaction of the director/promoter, rather than a company transaction.
Possible Accounting Entries - *Debit*: Director's/ Promoter's personal account (in the company's books) -
*Credit*: Bank account (for the remittance made)
Considerations -
*Compliance with RBI regulations*: Ensure compliance with RBI regulations regarding LRS and remittances. -
*Tax implications*: Consider tax implications for the director/promoter and the company.
- *Transparency and disclosure*: Maintain transparency and disclose the transaction in the company's financial statements, if required. Recommendations -
*Maintain records*: Maintain proper records and documentation to support the transaction. By following these guidelines, you can accurately record the private remittance in the books of accounts and ensure compliance with regulations.
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