$250,000 per person per financial year. That is how much any Indian resident can send abroad without needing RBI approval, for education, travel, gifts, investments, property purchases, or medical treatment.
The LRS was introduced in 2004 and has become the primary channel for Indians investing overseas, funding children's education abroad, or buying foreign property. But the real complexity is not the limit. It is the Tax Collected at Source (TCS) that the bank deducts before your money leaves India.
TCS rates after Budget 2026 (effective April 1, 2026)
- Education (self-funded): 2% above ₹10 lakh threshold (reduced from 5%)
- Education (loan-funded): 0% (fully exempt)
- Medical treatment: 2% above ₹10 lakh threshold
- Overseas tour packages: 2% from first rupee (no threshold, simplified from tiered system)
- All other purposes (investments, gifts, property): 20% above ₹10 lakh threshold
The TCS is not a tax you lose. It is an advance tax payment creditable against your income tax liability when you file returns. But it creates a cash flow impact at the time of remittance.
Meet Ananya sending $80,000 for her son's US tuition
Ananya remits ₹67,00,000 (~$80,000) for education fees. Since it exceeds ₹10 lakh:
- First ₹10 lakh: 0% TCS
- Remaining ₹57 lakh: 2% TCS = ₹1,14,000
- Total outflow: ₹68,14,000 (principal + TCS)
- She claims the ₹1,14,000 as tax credit when filing her ITR next year.
