How Much Money Can You Send Abroad from India? RBI LRS Rules

India allows resident individuals to remit up to USD 250,000 per financial year under the RBI’s Liberalised Remittance Scheme (LRS).

This is subject to purpose restrictions and Know Your Customer (KYC) compliance requirements.

From April 1, 2025, Tax Collected at Source (TCS) applies only after combined LRS remittances cross ₹10 lakh in a financial year.

Additionally, concessional rates apply for education and medical purposes, and higher rates apply for most other uses.

This guide covers several aspects of foreign remittances from India, such as:

• How much money can you transfer abroad from India?
• TCS for sending money abroad from India
• What is the TCS rate for foreign remittances?
• What is the tax on foreign remittance for NRIs?

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Le informazioni contenute in questo articolo hanno un valore puramente indicativo. Non costituiscono consulenza finanziaria, legale o fiscale e non rappresentano una raccomandazione o una sollecitazione a investire. Alcuni fatti potrebbero essere cambiati dal momento della stesura.

How much money can I transfer from India to abroad?

Resident individuals can remit up to USD 250,000 per financial year for permissible current and capital account transactions sent abroad under LRS.

This limit applies to a wide range of purposes, such as:

• Studying abroad
• Travel expenses
• Maintenance of close relatives living overseas
• Medical treatment abroad
• Investment in foreign securities or real estate

It is important to note that this limit of USD 250,000 is cumulative, meaning it covers all remittances made during a financial year, regardless of the purpose.

Any transfer beyond this requires prior approval from the RBI.

Certain prohibited uses remain outside LRS and are not allowed, which are:

• Sending money abroad for activities explicitly banned under Schedule I of the FEMA Current Account Transaction Rules, 2000, such as purchasing lottery tickets, sweepstakes, or restricted magazines, or for items listed in Schedule II.
• Transferring funds from India to meet margin requirements or margin calls with overseas exchanges or foreign counterparties.
• Buying Foreign Currency Convertible Bonds (FCCBs) of Indian companies in secondary markets outside India.
• Engaging in foreign exchange trading overseas.
• Any capital account remittance to jurisdictions that the Financial Action Task Force (FATF) identifies as “non-cooperative countries or territories.”
• Direct or indirect transfers to individuals or entities flagged by the Reserve Bank of India (RBI) as posing a significant risk of terrorism.
• Making gifts in foreign currency from one resident to another, for credit into the recipient’s foreign currency account held abroad under the LRS.

How can I transfer money from India to another country?

There are multiple ways to remit funds internationally from India. For large-value transfers, bank wires remain the most secure method.

1. Banks (Authorised Dealers Category-I):

The RBI authorises most leading Indian banks to handle outward remittances.

Customers can initiate transfers via SWIFT wire transfer, which directly credits the recipient’s overseas account.

2. Online Money Transfer Operators:

Certain RBI-approved operators, such as Wise (formerly TransferWise), Western Union Business Solutions, or BookMyForex, partner with banks to provide faster, often cheaper, digital transfers.

3. Demand Drafts:

Though less common now, foreign currency demand drafts can be purchased from banks and mailed to the beneficiary.

This method is slower but sometimes used for official payments.

4. Forex Cards and International Debit/Credit Cards:

Prepaid forex cards or international debit cards can be loaded in India and used abroad for education fees, travel expenses, or living costs.

What documents are needed for large transfers in India?

To comply with RBI and FEMA (Foreign Exchange Management Act) regulations, individuals must provide specific documents when transferring money abroad, such as:

• PAN card (mandatory for all outward remittances)
• Form A2 (a declaration form specifying the purpose of the transfer)
• KYC documents (valid ID proof and address proof)

Additional supporting documents depending on the purpose like:

• Admission letter and fee details for education remittances
• Medical reports and hospital bills for medical treatment
• Property documents for real estate investments

Banks may request additional documentation if the remittance amount is large or if the purpose falls under stricter scrutiny.

Which is the cheapest way to send money abroad?

Bank-to-bank SWIFT often has predictable compliance but may face correspondent fees.

On the other hand, some fintechs or AD-II money changers can offer sharper FX for common corridors.

Comparing the all-in cost (FX margin plus fees) across providers and corridors before initiating the transfer generally yields savings.

Ensure the provider is an authorized dealer (AD) or otherwise compliant with RBI rules.

Overall, costs vary by exchange rate markup, transfer fee, intermediary bank charges, and speed.

TCS on Foreign Remittance

Since October 1, 2020, India has imposed Tax Collected at Source (TCS) on outward remittances under the LRS.

This means the bank or authorised dealer collects tax when you transfer money abroad. The rate depends on the purpose and amount of remittance.

From April 1, 2025, TCS applies only on the portion exceeding ₹10 lakh (approximately USD 11,250) per financial year across all LRS remittances combined per PAN.

Concessional categories are for education and medical purposes, whereas higher rates apply for others.

Banks collect TCS at the time of remittance and report it to the tax system, which later appears in Form 26AS for credit while filing the income tax return (ITR).

What is the TCS on foreign remittances in 2025?

TCS is not an additional tax cost if claimed against the final tax liability; it is a collection mechanism at source on qualifying LRS remittances above the threshold.

Applicable rates depend on the purpose and funding source (e.g., specified education loans), with low TCS for some categories and higher rates for others.

As of FY 2025, the following TCS rates apply:

Below ₹10 lakh:

• Up to ₹10 lakh in a financial year: No TCS (except for overseas tour packages, where 5% applies from the first rupee).

Above ₹10 lakh:

• 5% TCS for general remittances like education, medical treatment, etc.
• 20% TCS on overseas tour packages.

These rates may change with government budgets, so it’s important to check the latest Finance Act updates.

Separately, the LRS cap of USD 250,000 is a FEMA/RBI limit and is independent of the TCS threshold; both must be observed simultaneously.

How much foreign remittance is tax-free in India?

The first ₹7 lakh of outward remittance per financial year used to be tax-free (except for tour packages) until 2025.

Up to ₹10 lakh in total LRS remittances per PAN per financial year attracts no TCS from April 1, 2025; beyond that, purpose-wise TCS rates apply as above.

This exemption is applicable per individual, not per transaction

Can TCS be claimed as a refund?

Yes. TCS collected appears in Form 26AS and can be claimed as credit when filing the ITR; if the final tax liability is lower than credits, a refund is due, subject to processing timelines.

The actual cash recovery occurs through the standard income-tax refund mechanism after return processing by the department.

TCS on Foreign Remittance for NRIs

LRS applies to resident individuals.

• NRIs primarily move funds using NRE/NRO/FCNR routes rather than LRS, which changes both limits and compliance steps compared to resident remitters.
• Repatriation from NRE and FCNR(B) accounts is generally fully free and permissible. It’s because these accounts hold foreign-source funds or designated foreign currency deposits that are freely repatriable under FEMA and RBI directions.
• For NRO accounts, NRIs can typically repatriate up to USD 1 million per financial year (April–March) per individual, covering assets like rental income, sale proceeds of property, and other eligible Indian-source funds, subject to documentation and applicable taxes.
• Banks usually require Form 15CA/15CB and proof of tax payment or exemption as relevant.

These NRO repatriations are not LRS transactions and are handled under separate FEMA provisions for non-residents.

Therefore, the resident LRS TCS logic does not generally apply to such NRO/NRE/FCNR outflows; instead, tax compliance is evidenced via certificates and returns before repatriation.

Practical pointers:

• Use NRE/FCNR for free repatriation of foreign-source funds; use NRO for Indian-source income with caps and tax proofs, including 15CA/15CB when required by the bank.
• If a resident family member in India sends maintenance/education funds to an NRI relative, that outward remittance falls under the sender’s LRS limits and TCS rules, distinct from NRI repatriation rules on NRO/NRE balances.

Is there GST on international payments?

GST does not apply to the principal amount remitted abroad under LRS or permitted NRI repatriations. Outward transfer of own funds is not a taxable supply by the remitter under GST.

However, domestic charges levied by banks or authorized dealers can attract GST at applicable rates and will be disclosed in the fee invoice or advice.

For example, transfer fees, conversion margin as part of a service, or compliance charges. What to check on invoices:

• Line items for transfer/processing fees often carry GST, while the FX principal does not; exchange rate margins themselves are typically embedded in the quote rather than taxed separately, but any explicit service fee can draw GST.
• For fintech/bank intermediaries, the outward remittance service rendered in India to the account holder is where GST applies; the overseas beneficiary’s receipt of funds remains outside the GST net in India.

Conclusione

A well-planned outward transfer from India starts with two pillars:

The USD 250,000 annual LRS limit and the post–April 1, 2025, TCS rules, which together determine how much can be sent and what cash flow impact arises from collection at source above the ₹10 lakh threshold per PAN.

The remitters can minimize friction while staying fully compliant by:

• Choosing the right channel (AD bank or compliant provider)
• Preparing purpose-wise documentation (Form A2, purpose code, invoices/letters)
• Comparing all-in costs (FX spread, fees, and GST on fees)

Finally, remember that GST is not charged on the foreign currency sent; it applies only to domestic fees.

So, optimize providers by evaluating the fee line (plus GST) and the exchange rate to get the best net outcome.

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