LRS & TCS Tracker
Track your LRS remittances and calculate TCS liability for the $250,000 annual limit
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LRS & TCS Guide for India Remittances (2025-26)
The Liberalised Remittance Scheme (LRS) is one of the most important RBI facilities for resident Indians — and one of the most confusing. Since October 2023, the Tax Collected at Source (TCS) regime has added complexity: your bank now deducts TCS before releasing your remittance if your aggregate outflows cross ₹7 lakh in a financial year. Missing this can mean unexpected cash shortfalls at remittance time.
What counts under LRS?
LRS covers outward remittances for education, medical treatment, travel, investment, gifts, and family maintenance abroad. It does not cover imports of goods or services (covered by current account transactions) or business payments. Every resident individual has an annual ceiling of USD 250,000 — roughly ₹2.1 crore at current rates — which resets every April 1.
NRIs repatriating from NRO accounts use a different FEMA route (USD 1 million/year cap) and are not subject to LRS. If you have returned to India and are now a resident, your LRS limit is USD 250,000.
TCS rates by purpose (FY 2024-25 onwards)
The Finance Act 2023 restructured TCS on LRS. The threshold of ₹7 lakh (aggregate across all remittances in a financial year) remains, but rates diverged sharply:
- Education via approved loan: 0.5% on amount above ₹7L
- Self-funded education / medical abroad: 5% on amount above ₹7L
- All other purposes (investments, gifts, travel, family maintenance): 20% on amount above ₹7L
The 20% rate for "other" purposes is significant — on ₹10 lakh of investments abroad, you pay ₹60,000 in TCS (20% of ₹3L above threshold). This is recoverable via ITR, but ties up cash in the meantime.
How TCS is calculated on multiple remittances
TCS kicks in on aggregate amounts — not per transaction. If you send ₹4L in June and ₹5L in August, the first ₹3L of the August remittance is threshold-free (bringing your total to ₹7L), and TCS applies only to the remaining ₹2L. This is why tracking your running FY total matters: your bank may not always calculate this correctly if you use multiple banks.
Reclaiming TCS via ITR
TCS is visible in Form 26AS and the Annual Information Statement (AIS) in the Income Tax portal. File your ITR after the financial year ends (July 31 deadline for individuals) and claim the TCS as credit. If your total income tax liability is lower than the TCS collected — which is common for middle-income earners — you receive a refund, typically within 3–6 months of filing.
Always verify that your bank has your correct PAN before initiating any LRS remittance above ₹7L. A PAN mismatch means TCS is credited to the wrong account and refunds become difficult.
Practical tips for minimising TCS pain
For education purposes, finance the first year via an approved bank loan even if you can afford it from savings — the TCS rate drops from 5% to 0.5%, saving ₹45,000 per ₹10L remitted. For investment remittances, consider spacing them to stay under ₹7L per year if your investment amount permits — though with a 20% rate, the TCS refund is still substantial and worth tracking.
Frequently Asked Questions
What is LRS and who can use it?
The Liberalised Remittance Scheme (LRS) is an RBI facility that allows resident Indian individuals to remit up to USD 250,000 per financial year (April–March) abroad for any permissible purpose — education, medical treatment, investments, travel, gifts, or family maintenance. Minors can also remit under LRS, countersigned by their natural guardian. NRIs generally do not use LRS for repatriation from NRO accounts — that is governed separately under FEMA.
What is TCS on LRS and when is it collected?
Tax Collected at Source (TCS) is collected by your AD (Authorised Dealer) bank at the time of the remittance above ₹7 lakh aggregate in a financial year. The rate depends on purpose: 0.5% for education via approved loan, 5% for self-funded education and medical, and 20% for all other purposes. TCS is not an additional tax — it is an advance tax credit you can claim when filing your ITR.
How do I reclaim TCS collected by my bank?
TCS is reflected in Form 26AS and AIS in your Income Tax portal. When you file your ITR, claim it as credit under 'TDS/TCS credit'. If your total tax liability is lower than TCS collected, you receive a refund. TCS is collected by the bank, so ensure the PAN they have on file is your correct PAN — mismatches delay refunds.
Does the $250,000 annual limit reset each financial year?
Yes. The LRS limit of USD 250,000 resets on April 1 every year (start of new Indian financial year). Amounts remitted in FY 2024-25 (April 2024 – March 2025) do not count against your FY 2025-26 limit. Similarly, the ₹7 lakh TCS threshold resets every April 1.
Is NRO account repatriation counted under LRS?
No. NRO repatriation is a separate FEMA provision — NRIs can repatriate up to USD 1 million per financial year from NRO accounts (after paying applicable taxes). This is not counted against the USD 250,000 LRS limit, which applies only to resident Indians. NRE account transfers are freely repatriable without any limit and do not require Form 15CA/15CB.