The Liberalised Remittance Scheme (LRS) is the RBI route under which a resident individual can remit up to USD 250,000 per financial year for permissible capital and current account transactions, including investment in foreign equity, debt, and property.
The USD 250,000 limit is per individual per FY (not per household, not per transaction). It resets on 1 April each year. Married couples can each remit USD 250,000 = USD 500,000 combined. Minor children can remit through their guardian using their PAN, subject to RBI scrutiny.
Permitted LRS investments: (a) Listed and unlisted foreign equity (direct broker accounts at Interactive Brokers, Charles Schwab, etc.); (b) Foreign mutual funds and ETFs; (c) Foreign immovable property; (d) Lending to NRIs (close relatives); (e) Gifts. NOT permitted: leveraged forex / CFDs, lottery, foreign futures and options as speculation, virtual currency trading via foreign exchanges (post-2022 RBI guidance).
Mechanics: Open a broker / bank account abroad using your PAN. File Form A2 with your remitting Indian bank. The bank collects TCS on the LRS amount above Rs 7 lakh threshold (20% on non-education / non-medical, 5% on education above threshold).
Example 1: A Bengaluru-based investor wants to allocate Rs 50 lakh to US tech via Interactive Brokers. They convert in two FYs: USD 250k (~Rs 20 lakh) in March 2027 and USD 250k in April 2027 (new FY). Bank collects 20% TCS on amount above Rs 7 lakh per remittance, claimable in ITR.
Example 2: A couple jointly invests in a London apartment. Husband and wife each remit USD 250,000 in the same FY, totalling USD 500,000 (~Rs 4.15 crore at Rs 83 / USD). Both file Form A2; TCS applies per individual.
The LRS route doesn't permit unlimited reverse remittance back into India — capital and gains can be brought back freely, but the Indian-bank account they enter is liable for tax tracking.
Disclaimer: Educational content from MintByte (ARN-314872, MFD). Examples are illustrative. SEBI Investment Adviser registration is in process; we do not provide personalized LRS or cross-border advice.