LRS: how much money you can send abroad from India

If you want to send money abroad for study, travel or investment, there is a scheme that sets how much you can send. It is called the LRS. This guide explains what the Liberalized Remittance Scheme is and how it works.

Quick answer

The Liberalized Remittance Scheme (LRS) is an RBI facility that lets a resident individual send money abroad up to a set limit each financial year for permitted purposes. These include travel, education, medical care, gifts and overseas investment. LRS makes cross-border remittances simple, within rules set by the Reserve Bank of India.

Key takeaways

• LRS lets residents send money abroad up to a yearly limit.
• It covers travel, education, medical care, gifts and investment.
• The Reserve Bank of India sets and reviews the limit.
• It applies per individual, per financial year.
• Some remittances attract tax collected at source.

What is the Liberalized Remittance Scheme?

The Liberalized Remittance Scheme, or LRS, is a facility from the Reserve Bank of India. It allows a resident individual to send money abroad up to a set amount each financial year, for a range of permitted purposes, without needing special approval.

Before LRS, sending money abroad was tightly controlled. LRS made it simpler by setting one clear yearly limit within which residents can freely remit money for allowed uses.

What can LRS be used for?

LRS covers many common needs. These include foreign travel, education abroad, medical treatment, maintenance of relatives living overseas, and gifts. It also allows overseas investment, such as buying foreign shares or property, within the rules.

There are some purposes that are not allowed, such as certain speculative activities and remittances to countries or entities flagged by regulators. The scheme is meant for genuine personal and investment needs.

How much can you send under LRS?

LRS sets a maximum amount that a resident individual can remit abroad in a financial year, across all permitted purposes combined. The exact limit is set by the RBI and is reviewed from time to time.

The limit is per individual, so family members can each use their own. Because the amount can change, you should check the current RBI limit before planning a large remittance.

Is there tax on LRS remittances?

Yes, certain remittances under LRS attract a tax collected at source, known as TCS. The bank or provider collects this tax when you send the money, and it can later be adjusted against your total tax. The rates and thresholds depend on the purpose and can change.

Because tax rules apply and are revised from time to time, you should check the current position before sending money abroad. This is knowledge to understand the scheme, not advice for a specific case.

Why does LRS matter?

LRS is the main route by which resident individuals legally move money out of India for personal use and investment. It affects families funding education abroad, patients seeking treatment, and investors diversifying into foreign assets.

For the wider economy, LRS remittances are one of the outflows that affect the rupee and the country's foreign exchange position. So the RBI watches and manages the scheme as part of overall currency policy.

Frequently Asked Questions