Liberalised Remittance Scheme (LRS)
Guidance for resident individuals remitting funds abroad under the Reserve Bank of India's Liberalised Remittance Scheme (LRS).
The Liberalised Remittance Scheme (LRS) allows resident individuals to remit up to USD 250,000 per financial year abroad for permitted current and capital account transactions, such as education, travel, medical treatment, gifts, and investment in overseas property, shares or funds. Remittances beyond this limit require prior approval from the Reserve Bank of India (RBI). Since 1 October 2023, most LRS remittances also attract Tax Collected at Source (TCS) above specified thresholds, making upfront planning important.
What our Liberalised Remittance Scheme advisory covers
LRS compliance sits at the intersection of RBI regulation and income tax, so both angles need to align.
- Checking eligibility and permitted purposes under the scheme
- Tracking cumulative remittances against the annual limit
- Advising on Tax Collected at Source (TCS) implications
- Preparing bank-required declarations (Form A2) and documentation
- Structuring family remittances across multiple members
- Advising on overseas investment reporting obligations
What this service includes
Practical support for individuals and families remitting funds under LRS.
Eligibility & Purpose Check
Confirming the transaction qualifies as a permitted current or capital account remittance.
TCS Advisory
Calculating Tax Collected at Source liability and its treatment as a credit in your income tax return.
Bank Documentation
Preparing Form A2 and supporting documents your bank requires before processing the remittance.
Family Remittance Planning
Structuring remittances across family members to use each individual's annual limit efficiently.
Our process
From initial consultation to completion.
Purpose Assessment
Confirming the intended use — education, travel, investment, gifts — falls within permitted LRS purposes.
Limit & TCS Check
Reviewing remittances already made in the financial year and computing applicable Tax Collected at Source.
Documentation
Preparing Form A2 and any supporting invoices, offer letters or investment documents the bank requires.
Remittance & Reporting
Coordinating the transfer and advising on any related tax return disclosures.
Why LRS remittances need advance planning
What sets our approach apart.
The annual cap is per person, not per family
Each resident individual — including minors, through a guardian — has an independent USD 250,000 limit, which can be used to plan family remittances.
TCS affects cash flow
Tax Collected at Source is deducted upfront by the bank and only recovered later as a credit against your tax liability, so it needs to be factored into timing.
Purpose classification matters
Certain transactions are restricted or prohibited under LRS, and misclassifying a remittance can lead to compliance issues later.
Liberalised Remittance Scheme questions answered
What people ask before engaging us.
Planning a remittance abroad?
We'll help you structure it within LRS limits and manage the tax implications.
