In plain words: want to send money abroad for education, travel, investment or a gift? For most resident Indians, the Liberalised Remittance Scheme (LRS) is the route — a simple annual allowance for a wide range of purposes.
What the LRS is
Under the LRS, a resident individual can remit up to USD 250,000 per financial year abroad for permitted current and capital account transactions — without needing specific RBI approval. It is the workhorse of personal cross-border transactions.
What you can use it for
- Education abroad — fees and living expenses.
- Travel — private and business trips.
- Medical treatment abroad.
- Gifts and donations.
- Investment — foreign shares, deposits, and property abroad.
- Maintenance of close relatives abroad.
The limit and how it works
- The ceiling is USD 250,000 (or equivalent) per financial year, per individual — including minors.
- A family can pool individual limits for a common purpose, within each member's cap.
- You remit through your AD bank with a simple LRS declaration and PAN.
Points to watch
- Tax collected at source (TCS) may apply above certain thresholds — a tax matter separate from FEMA, but budget for it.
- Some purposes are outside LRS or prohibited (for example, remittances for certain speculative or banned activities).
- Money remitted under LRS for investment can be held abroad, but income should be dealt with as the rules require.
Frequently asked questions
Is the USD 250,000 limit per person or per family? Per individual, per financial year — family members have their own limits.
Can I buy foreign shares or property under LRS? Yes — both are permitted capital account uses within the limit.
Does TCS mean extra tax? TCS is collected at source and adjustable against your tax — it is a tax, not a FEMA charge.
How Vakil Help Desk helps
Vakil Help Desk advises on FEMA compliance, remittances, NRI matters, foreign investment and compounding — and represents clients in ED FEMA proceedings. If you have a cross-border transaction or a FEMA notice, we can help you get it right.
This article is for general legal awareness, not individual legal advice. FEMA rules, limits and forms are revised by the RBI and the Government from time to time, and the right treatment depends on your facts and the current position. Please consult a professional before acting on a cross-border transaction.