LRS Explained: The Quiet Rules That Shape Outbound Investing

The Liberalised Remittance Scheme allows resident individuals to remit up to USD 250,000 per financial year for permissible capital and current account transactions — including investment in overseas securities and, importantly, in GIFT City IFSC funds. The limit is per individual, so a family can aggregate across members within the rules.

The scheme is the gateway for almost all outbound retail investing from India. Understanding its edges — what counts toward the limit, what documentation banks require, and how the timing of remittances interacts with the financial year — is essential before committing capital.

Remittances under LRS attract Tax Collected at Source above a threshold. TCS is not a tax in itself — it is a credit you can set against your income-tax liability — but it is a real cash-flow consideration that affects how much you actually deploy versus how much leaves your bank account.

Rates and thresholds change with each Finance Act; treat any number you read as indicative and confirm the current position with your chartered accountant before remitting.