Liberalised Remittance Scheme (LRS): $250,000 Limit & TCS Rules (FY 2025-26)
Last verified: June 2026, against RBI Liberalised Remittance Scheme rules, IFSCA/IFSC norms and the Budget 2025 TCS changes cited below. Rules in this area change often and vary by bank — confirm specifics with your authorised dealer before remitting. This is general information, not personal financial advice.
Want to send money abroad — to fund a child’s education, buy foreign shares, travel, or invest in property overseas? The route for resident Indians is the RBI’s Liberalised Remittance Scheme (LRS), which lets you remit up to USD 250,000 per financial year. Since 1 April 2025 the tax-at-source rules have eased, so here is the up-to-date picture for FY 2025-26.
What the LRS is
Under the LRS, every resident individual — including minors (a guardian signs) — can freely remit up to USD 250,000 per financial year for permitted current and capital account transactions, without prior RBI approval. The limit is per person, so a family of four can collectively remit up to USD 1 million a year. Remittances are made through an authorised dealer (AD) bank, and quoting your PAN is mandatory.
What you can use it for
- Overseas education and medical treatment.
- Travel — private or business.
- Gifts and donations, and maintenance of relatives abroad.
- Investments — foreign shares, bonds, ETFs, property, and foreign-currency deposits (including through GIFT City IFSC and platforms that let you invest in US stocks from India).
What is not allowed
The LRS cannot be used for: margin or leveraged forex trading, buying lottery tickets or banned magazines, remittances to countries identified as non-cooperative by the FATF, or remittances to entities flagged for terrorism/illicit activity. Trading in foreign exchange abroad and speculative products outside permitted investments are off-limits.
TCS on LRS — the FY 2025-26 rules
Banks collect Tax Collected at Source (TCS) on LRS remittances. Budget 2025 raised the annual threshold from ₹7 lakh to ₹10 lakh, effective 1 April 2025. Below ₹10 lakh in aggregate during the year, no TCS applies (other than tour packages). Above ₹10 lakh:
| Purpose | TCS above ₹10 lakh |
|---|---|
| Education funded by an education loan | Nil (TCS removed from 1 Apr 2025) |
| Education (own funds) & medical treatment | 5% |
| Investment, travel, gifts and other purposes | 20% |
| Overseas tour packages | 5% up to ₹10 lakh, 20% beyond |
TCS is not an extra tax. It is collected upfront and you claim it back as a credit (or refund) when you file your ITR. See also our guide to TCS on foreign transactions.
How to remit under LRS
- Choose your AD bank and the purpose of remittance.
- Submit Form A2 and an LRS declaration confirming you are within the USD 250,000 annual limit.
- Provide PAN and supporting documents (e.g. university invoice for education).
- The bank applies TCS if you cross ₹10 lakh and processes the transfer.
Don’t forget foreign-asset reporting
If you invest abroad, you must disclose foreign assets and income in Schedule FA of your ITR. Capital gains on foreign shares are taxable in India — long-term gains (held 24 months or more) at 12.5% without indexation, short-term at your slab rate.
FAQs
What is the LRS limit per year?
USD 250,000 per financial year per resident individual, including minors.
Is there TCS below ₹10 lakh?
No, from 1 April 2025 there is no TCS below ₹10 lakh in a year (except overseas tour packages). Above ₹10 lakh, rates depend on the purpose.
Can I get the TCS back?
Yes. TCS is adjusted against your income-tax liability and refunded if excess when you file your ITR.
Does the limit reset every year?
Yes, the USD 250,000 limit is per financial year (April–March).
