LRS is the rulebook every Indian resident indirectly uses the moment they buy forex. It sets a ceiling of USD 250,000 per person per financial year for current-account and most capital-account transactions — and it's the reason your dealer asks so many questions.
01
What counts toward the limit
- Overseas travel (leisure or business)
- Tuition and living expenses for education abroad
- Medical treatment outside India
- Gifts to family and friends
- Investments in foreign equities and property
- Any forex card load for private visits
02
What does NOT count
- Business-related remittances by companies (under ODI, not LRS)
- Payments by NRIs out of repatriable accounts
- Loan repayments made in INR
03
TCS — the number that matters after the limit
TCS (Tax Collected at Source) is withheld by your forex provider when you remit above a threshold. It's not a tax — it's a credit you can reclaim on your ITR. The rate depends on purpose, not amount.
- 0% — Education funded by an Indian bank loan under Section 80E
- 2% — Self-funded education and medical remittance
- 20% — Overseas tour packages, gifts, and general travel (above ₹10 lakh)
No — LRS is per individual. Two adults in a family can remit up to USD 500,000 combined, but each transaction is recorded against the specific remitter's PAN.
You need prior RBI approval via the authorised dealer. The AD Category-I bank files a special application; approvals are case-by-case.
