Foreign Remittance Limit in India: LRS Rules and TCS (2026)

For a resident individual, the foreign remittance limit is USD 250,000 per financial year, because that is the ceiling the Reserve Bank of India (RBI) sets for sending money abroad under the Liberalised Remittance Scheme. This limit is a single annual quota that covers most personal purposes, from travel and education to overseas investment, and it applies when money leaves India rather than when it comes in.

The quota is linked to your PAN, resets on 1 April, and does not carry forward. Tax Collected at Source (TCS) is a separate layer that applies once your outward remittances cross ₹10 lakh in a financial year, and the rate depends on why you are sending the money. Everything below is dated as of July 2026, and it is educational information, not tax or legal advice.

Before the detail, here is how the number changes with who is sending and in which direction. The USD 250,000 figure is specific to resident individuals sending money out under the Liberalised Remittance Scheme.

The most common misreading is to assume the USD 250,000 cap applies to money you receive from abroad. It does not. This guide focuses on the individual outward limit, since that is the number most people mean when they search for the foreign remittance limit.

The Liberalised Remittance Scheme (formally the LRS Liberalized Remittance Scheme), usually shortened to LRS, is the RBI framework that lets a resident individual remit up to USD 250,000 per financial year abroad without seeking case-by-case approval. It sits within the wider FEMA rules, the Foreign Exchange Management Act, which governs all cross-border money movement in India.

A few features decide how far the quota stretches:

• Per person, not per family: each individual has their own USD 250,000, so a family of four can together remit up to USD 1,000,000 in a year, each using a separate PAN.
• Financial year basis: the limit runs from 1 April to 31 March and resets each year. Unused headroom is simply lost since it does not roll over.
• Includes minors: a minor's remittances also fall under LRS, and the form must be countersigned by a natural guardian.
• All authorised dealers combined: the cap is tracked across every bank you use, so you cannot reset it by switching banks.

Because the scheme is meant for genuine personal transactions, banks classify each transfer against a purpose code before releasing funds. If you want the mechanics of the transfer itself, this walkthrough on how to send money abroad from India covers the sequence end to end.

The single USD 250,000 quota is shared across both current-account purposes (routine spending) and capital-account purposes (building assets abroad). Knowing which bucket a payment sits in matters, because the distinction between capital account vs current account transactions carries into how it is reported.

For most people the interesting part is investing overseas. Direct investment routes such as ODI vs OPI draw from the same LRS quota for individuals, so buying foreign shares, an overseas property, or a unit in a foreign fund all compete for the same USD 250,000 in a year.

The LRS cap is for resident individuals only. It generally does not apply to companies, partnerships or other entities, and it never applies to inward money.

• Resident individuals: covered, including minors. This is the audience the USD 250,000 limit is written for.
• Businesses: not under LRS. A company paying for imports, software or services abroad remits under current-account rules with no fixed annual cap, provided the payment is backed by an invoice or contract and cleared by an Authorised Dealer bank.
• Money coming into India: not capped at all. If your question is really about being paid by overseas clients, see the section further down, because the inward side follows a completely different rule.

If you are unsure which side of the border your transaction sits on, this explainer on inward remittance vs outward remittance draws the line clearly. The direction of the money, not the amount, is what decides the rule that applies.

TCS is the tax the bank collects at the point of remittance. As of July 2026, no TCS applies on LRS remittances up to ₹10 lakh in a financial year, taken as an aggregate across purposes. Above that threshold the rate depends on the purpose of the transfer, following the changes that took effect on 1 April 2026.

Rates as of July 2026 (FY 2026-27). Overseas tour packages are charged at 2% from the first rupee, with no ₹10 lakh threshold. Verify the current position with your bank or a chartered accountant before you remit.

A worked example makes the gap between purposes clear. Suppose you send ₹15 lakh in a year:

• As self-funded education: the first ₹10 lakh is free, and only the ₹5 lakh above it attracts 2%, so TCS is ₹10,000.
• As an overseas investment: the same ₹5 lakh above the threshold attracts 20%, so TCS is ₹1,00,000.

TCS is not a cost you lose. It is adjusted against your income-tax liability and refundable when you file your return, which is why it is worth reading alongside broader TCS on foreign remittance rules. It also sits apart from TDS on foreign payments, which is a business-side deduction rather than an individual collection.

Every outward remittance under LRS requires Form A2, a declaration to the bank stating the amount, the beneficiary and the purpose of the transfer. It is the document that ties your remittance to a specific purpose code and confirms it stays within your annual quota.

Alongside Form A2, banks typically ask for a standard set of paperwork before releasing funds.

The right classification comes from the RBI purpose-code list, and picking the correct purpose code for outward remmitance is what keeps the transaction clean in the bank's reporting. For larger or less routine transfers, the bank may also seek Form 15CA, and often a chartered accountant's Form 15CB, before it processes the payment.

It helps to remember that the fee you pay is separate from the tax. The bank charges for foreign remittance, including the exchange-rate markup, sit on top of any TCS, so two remittances of the same size can cost different amounts depending on the bank and the rate.

The USD 250,000 cap is a hard annual ceiling, not a soft guideline. Because every LRS remittance is reported against your PAN, banks can see your cumulative usage, so spreading transfers across several banks will not take you past it.

Going beyond the limit needs specific prior approval from the RBI. An unapproved breach is treated as a contravention of FEMA, which can attract penalties and compounding proceedings rather than a simple warning.

There is one nuance worth knowing. Money you have already remitted and invested abroad, and the income it earns, can be reinvested overseas without counting afresh against the next year's limit, as long as it is not brought back to India. Any foreign income you do repatriate is then assessed under the rules for tax on foreign income, which is a separate question from the LRS cap itself.

This is where most confusion sits, so it is worth stating plainly. There is no upper limit on money you receive into India from abroad for a legitimate purpose, because LRS governs money leaving the country, not money coming in.

An exporter or freelancer can be paid any amount by overseas clients. What matters on the inward side is documentation rather than a ceiling, which is why a clean foreign inward remittance trail on each payment is the real requirement. The tax treatment of those inflows follows the rules for tax on inward remittances to india, separate from any FEMA limit, and each inflow still needs the correct rbi purpose code for inward remittance.

So a freelancer earning USD 300,000 a year from foreign clients is well above the outward LRS ceiling, yet faces no inward limit at all. Exporters who prefer not to convert every inflow immediately can also hold earnings in an EEFC account rather than settling straight to rupees.

If your concern is getting paid rather than sending money abroad, that inbound flow is a different problem, and it is the one Xflow is built for. A receiving account collects export income in 25+ currencies, converts at the live mid-market rate, with custom pricing on the Scale plan above $10,000, and a Foreign Inward Remittance Advice is issued for each withdrawal. Xflow does not send money abroad or handle LRS remittances, so for outward transfers you would still use your bank; and inbound export receipts are not counted against the LRS outward cap in either case. If you want the paperwork side, the foreign inward remittance certificate is the record that closes the loop.

For anything with a tax or FEMA consequence, confirm the current position with a chartered accountant or the official RBI and Income Tax Department sources before you act. Rules and rates change between budgets, and this guide is a starting point, not a substitute for professional advice.