Sending money abroad: LRS and TCS
The USD 250,000 remittance limit, the TCS rates after the 2025 overhaul, and how to reclaim it
A resident individual can remit up to USD 250,000 per financial year abroad under the RBI Liberalised Remittance Scheme (LRS), for travel, education, medical treatment, gifts, maintenance of relatives, or investment and property. On these remittances, Tax Collected at Source (TCS) under Section 206C(1G) applies, and the Finance Act 2025 overhauled it from 1 April 2025: there is now zero TCS on overseas education funded by a loan from an approved institution, the no-TCS threshold for all purposes rose to Rs 10 lakh, and above Rs 10 lakh most remittances attract 20% (with 5% for education and medical). TCS is not a cost, it is a prepaid tax credit you reclaim in your return.
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Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact Income Tax Department. Read our editorial scope →
The LRS limit: USD 250,000 a year
The Liberalised Remittance Scheme lets a resident individual (including a minor, through a guardian) remit up to USD 250,000 per financial year for permitted current-account purposes (travel except to Nepal and Bhutan, gifts, donations, maintenance of relatives, business travel, medical, studies) and capital-account purposes (overseas property, portfolio investment, foreign bank accounts). The cap aggregates current and capital account across any number of transactions, and the older Schedule III facilities are subsumed within it. It is for individuals only, companies, firms and HUFs use the separate Overseas Investment route. Speculative derivatives and FATF non-cooperative jurisdictions are off-limits.
TCS on remittances (after the 2025 overhaul)
TCS under Section 206C(1G) is collected by your bank (or the tour operator) at the time of remittance. The Finance Act 2025 changed the rates from 1 April 2025.
TCS on LRS remittances (from 1 April 2025)
| Purpose | TCS |
|---|---|
| Overseas education funded by an approved-institution loan | NIL |
| Overseas education (self-funded) | 5% above Rs 10 lakh |
| Medical treatment | 5% above Rs 10 lakh |
| Overseas tour package | 5% up to Rs 10 lakh, 20% above |
| Other LRS (investment, property, gifts, maintenance) | 20% above Rs 10 lakh |
tipFunding your child's overseas education with a loan from an approved bank? Since April 2025 there is zero TCS on it, and for everything else the no-TCS threshold doubled to Rs 10 lakh.
TCS is a credit, and how 195 differs
The TCS collected is not an extra tax, it is a prepaid credit against your final income-tax liability, which you reclaim in your return (reconcile it in your 26AS and AIS). Note that without a PAN, or as a non-filer (a specified person under Sections 206AB/206CCA), a higher TCS applies. This LRS TCS is separate from Section 195 TDS: 206C(1G) is collected on an LRS remittance regardless of taxability, while Section 195 is deducted where a payment to a non-resident is itself taxable in India (royalty, technical fees and the like), needing Form 15CA and a CA's Form 15CB. A given transaction is resolved by characterisation, a personal LRS remittance or a taxable business payment.
warningTCS on a remittance to invest or buy property abroad is 20% above Rs 10 lakh, but it is a credit you reclaim in your return, not money lost. And bogus gifts that round-trip back into India as investment are exactly what the ED and RBI are hunting.
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Calculators
Source / notes
- FEMA 1999 + RBI Master Direction on the LRS (USD 250,000 per individual per FY)
- Income-tax Act 1961 s.206C(1G) (TCS on foreign remittance; FA2025 overhaul from 1 April 2025) (TCS consolidated into the Income-tax Act 2025 s.394)
- Income-tax Act 1961 s.206AB/206CCA (higher TCS for non-filers) + s.195 (distinct TDS on non-resident payments)
Frequently asked questions
How much money can I send abroad from India?+
Up to USD 250,000 per financial year as a resident individual, under the RBI Liberalised Remittance Scheme, for permitted purposes (travel, education, medical, gifts, maintenance, investment, property). The limit aggregates current and capital account across any number of transactions. Companies, firms and HUFs do not use the LRS, they use the separate Overseas Investment route.
How much TCS applies when I send money abroad?+
Since 1 April 2025: nil on overseas education funded by an approved-institution loan; 5% above Rs 10 lakh for self-funded education and for medical treatment; 5% up to Rs 10 lakh and 20% above for overseas tour packages; and 20% above Rs 10 lakh for other remittances (investment, property, gifts, maintenance). The no-TCS threshold rose from Rs 7 lakh to Rs 10 lakh for all purposes.
Is the TCS on foreign remittance a tax I lose?+
No. TCS under Section 206C(1G) is a prepaid credit against your income-tax liability, which you reclaim in your return (it appears in your 26AS and AIS). So even the 20% on a large investment remittance is recovered when you file, provided you have the income-tax liability to set it against, or a refund. Quote your PAN and file on time, as non-filers face a higher rate.
What is the difference between this TCS and Section 195 TDS?+
Section 206C(1G) TCS is collected by your bank on an LRS remittance regardless of whether the payment is taxable. Section 195 TDS is deducted where a payment to a non-resident is itself taxable in India (such as royalty or technical fees), and needs Form 15CA and a CA's Form 15CB. A personal LRS remittance falls under 206C(1G); a taxable business payment to a non-resident falls under 195.
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