TaxFinancial Glossary
LRS (Liberalised Remittance Scheme)
Definition
An RBI framework that allows Indian resident individuals to remit up to USD 250,000 per financial year abroad for permissible purposes including education, medical treatment, travel, investment, gifts, and maintenance of relatives. TCS applies on remittances above Rs 7 lakh per year.
Why It Matters
LRS is the primary channel for Indians to invest internationally, fund overseas education, or send money to family abroad. The USD 250,000 annual limit applies per individual, so a family of four can collectively remit up to USD 1 million per year. TCS of 5% (education) or 20% (other purposes) on amounts above Rs 7 lakh creates a cash flow impact that is recoverable when filing ITR.