$250,000/FY per person. Foreign stocks + property + education + travel + gifts. 20% TCS above ₹7L. Schedule FA disclosure mandatory. FEMA-compliant global diversification.
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 (post-Oct 2023): (1) ABOVE ₹7L per FY: 20% TCS. (2) UP TO ₹7L: 0% TCS. (3) EDUCATION (loan-funded): 0.5% above ₹7L. (4) EDUCATION (self-funded): 5% above ₹7L. (5) MEDICAL: 5% above ₹7L. EXAMPLE: $50K ($42L) foreign stock investment via LRS. (a) First ₹7L: 0%. (b) Remaining ₹35L: 20% TCS = ₹7L. (c) Claim ₹7L 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) ₹7L TCS threshold — split timing if possible. (3) FOREIGN STOCK investing: factor 20% TCS (recoverable). (4) EDUCATION: use education loan for 0.5% TCS (vs 5% self-funded). (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.