LRS Explained: How Much Money Can You Send Abroad from India in 2026?
If you're a resident Indian sending money abroad, whether it's tuition for a child studying in the US, funding a relative's medical treatment, or building an overseas investment portfolio, there's a hard annual ceiling on how much you're allowed to send, and a tax collection mechanism that catches a lot of people off guard the first time they cross it. Both are governed by the Liberalised Remittance Scheme, commonly just called LRS.
What Is the LRS?
The Liberalised Remittance Scheme is an RBI framework that lets any resident individual in India remit foreign exchange abroad, for a wide range of permitted purposes, without needing prior RBI approval for each transaction. It's the mechanism behind most legal outward money movement from India for individuals, from a parent wiring tuition money to a family investing in a US brokerage account.
The important word here is resident. LRS applies to resident Indians sending money out. It does not apply to NRIs — if you're an NRI moving your own NRO account funds out of India, you're under a completely different regime (the NRO repatriation limit of USD 1 million per financial year, covered in our NRE vs NRO FD guide), not LRS. The two get confused constantly, but they're separate rules for separate categories of people.
The $250,000 Annual Limit
Every resident individual can remit up to USD 250,000 per financial year (April to March) under LRS, across all purposes combined, not per transaction or per purpose. A few things about how the limit actually works:
- It's per person, not per family — a married couple each get their own $250,000, effectively $500,000 combined if both remit separately
- It's non-cumulative — unused limit from one financial year doesn't roll over; it simply resets to $250,000 fresh on April 1st
- It covers both current account transactions (education, travel, medical treatment, maintenance of relatives abroad) and capital account transactions (opening foreign bank accounts, buying foreign property, investing in foreign stocks or mutual funds)
Certain purposes, like specific business-related remittances or particular categories with separate RBI approval, sit outside LRS and aren't capped by this $250,000 figure — but for the vast majority of individual remittances, this is the number that matters.
What You Can Actually Use LRS For
The permitted purposes are broad, covering most reasons an individual would realistically send money abroad:
- Funding education for yourself or a family member studying overseas
- Medical treatment abroad, for yourself or someone you're supporting
- Gifts and donations to individuals or institutions abroad
- Maintenance of close relatives living abroad
- Overseas travel expenses (including tour packages)
- Investing in foreign stocks, ETFs, or mutual funds through international brokerage accounts
- Opening and maintaining a foreign currency bank account abroad
- Purchasing immovable property outside India
Some categories, buying lottery tickets, banned magazines, or remitting to countries on the FATF's non-cooperative list among them, are explicitly excluded regardless of the amount.
TCS on LRS Remittances: 2026 Rates
Tax Collected at Source (TCS) is where most people get an unpleasant surprise, since it's collected upfront by your bank at the time of remittance, not something you plan for separately. As of 2026:
| Remittance Purpose | TCS Rate | Threshold |
|---|---|---|
| Education (self-funded, not through a loan) or medical treatment | 2% | Only on the amount exceeding ₹10 lakh per financial year |
| Overseas tour packages | 2% (flat) | No threshold — applies from the first rupee |
| All other LRS remittances (investments, gifts, property, general purposes) | 20% | Only on the amount exceeding ₹10 lakh per financial year |
The ₹10 lakh no-TCS threshold applies per financial year, across your combined LRS remittances for that category, not per individual transfer. If you send ₹6 lakh in June and another ₹6 lakh in October for the same category, the second transfer crosses the threshold and TCS applies to the portion above ₹10 lakh, not the whole ₹6 lakh again from zero.
TCS Is Not an Extra Tax — It's a Credit
This is the part that causes the most unnecessary panic. TCS isn't money you lose, it's tax collected in advance and credited to your PAN, which you claim back (fully or partially, depending on your actual tax liability) when you file your income tax return, similar to how TDS on your salary works. The cash flow hit is real (you need the extra 2% or 20% available at the time of transfer, on top of the amount you're sending), but it isn't a permanent cost unless your actual tax liability happens to be lower than what was collected, in which case you get the difference refunded.
LRS vs. NRI Repatriation: Don't Mix These Up
This is worth repeating because it's the single most common point of confusion:
| LRS | NRI Repatriation (NRO) | |
|---|---|---|
| Who it applies to | Resident Indians | NRIs moving their own NRO funds |
| Annual limit | $250,000 | $1,000,000 |
| TCS applies? | Yes, per the rates above | No — TDS was already deducted on NRO interest when earned; separate Form 15CA/15CB certification is needed instead |
| Purpose | Sending money out for a wide range of personal/investment purposes | Moving your own already-taxed NRI funds back out of India |
If you're an NRI reading this wondering which limit applies to you, it's almost always the NRO repatriation rule, not LRS — LRS is specifically a resident-individual scheme.
A Practical Example
Say a resident Indian parent sends ₹18 lakh in a financial year to fund their child's tuition abroad, self-funded (not through an education loan). The first ₹10 lakh faces no TCS. The remaining ₹8 lakh, above the threshold, gets 2% TCS collected by the bank at the time of transfer, roughly ₹16,000. That ₹16,000 isn't lost, it shows up as a tax credit that offsets whatever income tax the parent owes for the year, and any excess beyond their actual liability comes back as a refund when they file.
FAQ
Does LRS apply to money I've already sent abroad from previous years? No, the $250,000 limit is a per-financial-year allowance, not a lifetime cap. It resets every April 1st, but unused amounts from prior years don't carry forward or add to the current year's limit.
Is there TCS on remittances funded through an education loan? No — remittances for education funded specifically through a loan from a recognized financial institution get a lower TCS treatment, generally exempt below the threshold amounts that apply to self-funded remittances. Confirm the exact current treatment with your bank, since loan-funded transfers are processed differently.
Can I use LRS to invest in US stocks or mutual funds? Yes, investing in foreign stocks, ETFs, and mutual funds through an international brokerage account is one of the explicitly permitted LRS purposes, subject to the same $250,000 annual cap and TCS rules as any other category.
What happens if I need to send more than $250,000 in a year? For most personal purposes, you can't exceed the limit under LRS in that financial year — you'd need to wait until the next financial year for additional capacity, or explore whether your specific purpose qualifies for a separate RBI approval route outside LRS, which is uncommon for individual remittances.
Does the TCS get charged again when the same money eventually comes back to India? No, TCS is a one-time collection at the point of outward remittance under LRS. Money that later returns to India (say, from a foreign investment) isn't hit by TCS again on the way back; it would instead be subject to whatever normal tax rules apply to the specific type of income or capital gain involved.
This is educational information based on 2026 RBI and tax rules, not financial or tax advice — LRS purpose categories and TCS rates are subject to change in future budgets, so confirm current rates with your bank or a tax professional before making a large remittance.