RBI LRS Deep
$250K Remittance Scheme

LRS = Liberalised Remittance Scheme. RESIDENT INDIANS can remit up to $250,000 (~₹2.1cr) per FINANCIAL YEAR abroad.

PER INDIVIDUAL (including minors). PURPOSES: (1) Foreign education. (2) Travel. (3) Medical treatment. (4) Foreign stocks/property/MF investment. (5) Gifts to relatives abroad. (6) Maintenance of relatives.

FAMILY of 4 = $1M combined. NO RBI approval needed within limit (automatic via authorized dealer bank).

LRS TCS (1 April 2025 se, Finance Act 2025): (1) ABOVE ₹10L per FY: 20% TCS (investment, gifts, etc.). (2) UP TO ₹10L: 0% TCS. (3) EDUCATION (financial-institution loan-funded): NIL TCS. (4) EDUCATION (self-funded): 5% above ₹10L. (5) MEDICAL: 5% above ₹10L. EXAMPLE: ₹42L foreign stock investment via LRS. (a) First ₹10L: 0%. (b) Remaining ₹32L: 20% TCS = ₹6.4L. (c) Claim ₹6.4L credit in ITR.

STRATEGIC: significant cash flow lock-up for foreign investors. Recoverable via ITR.

LRS FOREIGN INVESTMENT: (1) FOREIGN STOCKS: US/global equities via Vested, INDmoney, Interactive Brokers. (2) FOREIGN MUTUAL FUNDS + ETFs. (3) FOREIGN PROPERTY purchase. (4) FOREIGN BANK ACCOUNT (deposits). (5) CRYPTOCURRENCY (grey area — caution). DISCLOSURE: (1) Schedule FA in ITR mandatory. (2) Foreign capital gains taxable in India. (3) DTAA credit for foreign tax via Form 67.

STRATEGIC: global diversification 10-25% portfolio. Factor 20% TCS + Schedule FA compliance.

LRS PROHIBITED: (1) LOTTERY + gambling. (2) MARGIN trading abroad. (3) Purchase of FCCBs (foreign currency convertible bonds) of Indian companies. (4) Remittance to FATF non-cooperative countries. (5) Remittance to terror-linked entities. (6) Trading in foreign exchange (forex trading). ALLOWED: legitimate investment + education + travel + medical + gifts.

STRATEGIC: stick to permitted purposes. Forex/binary trading via LRS = FEMA violation + penalty.

LRS STRATEGY: (1) $250K annual limit per person — family of 4 = $1M. (2) ₹10L TCS threshold (FY 2025-26 se) — split timing if possible. (3) FOREIGN STOCK investing: factor 20% TCS (recoverable). (4) EDUCATION: education loan se NIL TCS (vs 5% self-funded above ₹10L). (5) SCHEDULE FA disclosure mandatory — avoid ₹10L/asset penalty. (6) FOREIGN PROPERTY: legitimate via LRS + FEMA compliant. (7) GIFT to NRI children abroad: within LRS limit. (8) DTAA credit via Form 67 for foreign tax. (9) MAINTAIN remittance records + bank certificates. (10) ENGAGE CA for > ₹50L annual LRS + foreign asset compliance. Cross-border tax complex.