Outward remittances by resident individuals are governed by the Liberalised Remittance Scheme (LRS), capped at USD 250,000 per financial year (April-March) across all authorized dealer banks and platforms combined; amounts beyond this require prior RBI approval. Inward remittances are governed separately under FEMA/RBI guidelines rather than LRS. Tax Collected at Source (TCS) applies to LRS remittances exceeding ₹10 lakh in a financial year: 2% for self-funded education/medical treatment abroad or overseas tour packages, and 20% for most other purposes — no TCS applies below the ₹10 lakh threshold.
LRS outward remittance cap: USD 250,000 per financial year (April-March), aggregated across all banks/platforms.
Remittances beyond the USD 250,000 LRS cap require prior RBI approval.
TCS applies above ₹10 lakh in LRS remittances per year: 2% for education/medical/tour packages, 20% for most other purposes.
Inward remittances are governed by FEMA/RBI rules, not the LRS (which applies only to outward transfers by residents).
Required Documents
Purpose declaration (Form A2)
PAN
Supporting documents for the stated purpose (education, medical, investment, etc.)
Common Mistakes
Assuming the LRS cap applies to NRIs receiving money in India — LRS governs outward remittances by residents, not inward transfers.
Not accounting for the 20% TCS on general-purpose remittances above ₹10 lakh, which is a steep default rate compared to the 2% rate for education/medical/tour purposes.