What Is LRS Remittance?
LRS or Liberalised Remittance Scheme is a foreign exchange policy that allows Indian residents to remit (send or transfer) money outside India up to a certain limit – i.e., USD 250,000 each financial year.
This remittance under LRS was started by the RBI (Reserve Bank of India) in 2004. The sole purpose of LRS was to simplify and standardize the process of sending money abroad from India. LRS remittance can be for various purposes under the purpose codes mentioned in the circular.
What are the Benefits of LRS Remittance?
Freedom to Invest Globally
Want to invest in global stocks like Apple, Tesla, and Google? LRS remittance makes it possible legally and easily.
Easy Overseas Payments
Education fees, rent abroad, and hospital bills — all can be paid directly under LRS.
Regulated, Transparent & Safe
Since it’s RBI-governed, your remittance is bank-routed, compliant, and transparent. So overseas investing stays secure and regulated.
Participate in Global Opportunities Early
Access companies and sectors not available in India, like Big tech, AI leaders, Global pharma & EV giants, via the LRS route.
Our LRS Partner
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ICICI Bank
What are the Eligibility Criteria for LRS?
- 01
Resident individual
› - 02
Minors are eligible too (via a guardian)
› - 03
Individuals with a Valid PAN card
› - 04
A sole proprietor (treated as an extension of the individual by RBI)
What Documents are Required for LRS Remittance?
Banks often request these documents to process LRS remittances.
- ✔
Form A2
- ✔
KYC documents
- ✔
Proof of Identity (Aadhaar card, PAN card)
- ✔
Proof of Address (utility bills like electricity, phone, or water bills)
- ✔
Bank-related (cancelled cheque and bank account details)
- ✔
Proof of Income (income certificate from a CA - Chartered Accountant)
Taxation rules under the LRS Scheme
Under the Liberalised Remittance Scheme (LRS), TCS (Tax Collected at Source) applies only when your total foreign remittance crosses ₹10 lakh in a financial year.
It means:
- No TCS applies on remittances up to ₹10 lakh (earlier ₹7 lakh)
- 20% TCS applicable on amounts above ₹10 lakh for foreign investments and overseas travel.
(Note: LRS allows higher overall remittance limits, but TCS starts only after ₹10 lakh.)
FAQs
You Asked, We Answered!
When was the Liberalised Remittance Scheme (LRS) introduced?
The Liberalised Remittance Scheme, or LRS scheme, was introduced by the Reserve Bank of India in 2004 to make foreign remittances easier for resident Indians. It allows individuals to send money abroad for various personal and financial needs legally.
Can we receive money under the LRS Remittance Scheme?
No, LRS is designed only for outward remittances — sending money from India abroad. For receiving foreign funds in India, other RBI inward remittance rules apply.
How much money is allowed under the Liberalised Remittance Scheme?
Resident individuals can remit up to USD 250,000 per financial year under LRS. This limit includes all purposes like education, travel, investments, and family support combined.
What is the maximum amount that can be remitted under LRS?
The maximum remittance allowed is USD 250,000 per individual in one financial year. Once this limit is reached, no further remittance can be made under LRS until the next year.
What are the prohibited transactions under LRS?
LRS cannot be used for gambling, betting, speculative trading, or prohibited crypto activities. Transfers to countries flagged as high-risk by FATF, and other LRS restricted transactions also exist.
Why is the Liberalised Remittance Scheme required?
LRS was created to give Indians easier access to investments, global education, travel, and other purposes. It ensures international transactions happen in a regulated and transparent manner.
Is it possible to remit funds to multiple beneficiaries under LRS?
Yes, you can send money to more than one person or institution abroad. However, the total remitted amount must stay within your annual LRS limit as prescribed by the RBI.
Is the Liberalised Remittance Scheme regulated by the RBI?
Yes, LRS is fully governed by the Reserve Bank of India and processed through authorised banks. This keeps all foreign remittances legal, safe, and compliant.
Can LRS remittance be made jointly with another family member?
No, LRS limits apply individually and cannot be pooled or transferred between family members. Each person must use their own separate annual limit.
Is PAN mandatory for LRS remittance?
Yes, providing a PAN card is compulsory for every transaction under LRS. It helps track remittances for regulatory and tax purposes.
Can I use LRS to send money for my child’s education abroad?
Yes, paying tuition fees, living expenses, and other education-related costs abroad is a permitted purpose under LRS. Many families commonly use LRS for overseas studies.
Can I invest in foreign stocks and assets using LRS?
Yes, LRS allows resident Indians to invest in international stocks, mutual funds, ETFs, and even overseas property. It's one of the easiest ways to diversify globally.
What Is the Annual Remittance Limit in LRS?
Under the Liberalised Remittance Scheme (LRS): You can send up to USD 250,000 every financial year (April to March).
Once the LRS limit is exhausted, you cannot remit funds outside India, even if the proceeds of the investments (made via LRS) have been brought back into the country.
Permitted Transactions Under the LRS Scheme
As per enabled remittance under the LRS scheme, you can invest in global markets via special purpose codes, which include;
| Sr no | Purpose code | Use |
|---|---|---|
| 1 | S0001 | Indian investment abroad in equity capital (shares) |