Liberalised Remittance Scheme (LRS)
Framework and Purpose
The Liberalised Remittance Scheme (LRS) was introduced by the Reserve Bank of India in 2004 under the Foreign Exchange Management Act (FEMA), 1999. It allows resident individuals (including minors) to remit up to USD 250,000 per financial year for any permissible current or capital account transactions. Permissible uses include overseas education, medical treatment, travel, maintenance of close relatives abroad, and foreign investments. The scheme liberalised forex outflows from the earlier rigid foreign exchange control regime under FERA (Foreign Exchange Regulation Act, 1973).
- LRS limit: USD 250,000 per individual per financial year
- Introduced: 2004 by RBI under FEMA (1999); periodically revised
- TCS under Section 206C(1G) of the Income Tax Act applies to AD (Authorised Dealer) banks collecting remittances under LRS
- Purpose of TCS: Tax collection mechanism (not an additional tax) — ensures high-value forex outflows by residents are captured in the tax net for audit/compliance purposes
- TCS rates (post-Budget 2026): 2% on education/medical remittances above ₹10 lakh; 20% on other LRS remittances above ₹10 lakh (investments, travel, etc.)
● Tracked since February 02, 2026 · last seen May 13, 2026 · updates as the daily brief publishes
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