The Liberalised Remittance Scheme (LRS) generally permits a resident individual to send up to US$250,000 equivalent abroad in an Indian April–March financial year for permitted current or capital transactions without separate RBI approval. It is an aggregate annual limit, not a fresh limit for every bank, purpose or family member. The RBI master direction states the scope and exclusions; medical, education or emigration needs can have specific additional routes.
Ananya's education transfer
Ananya arranges a hypothetical ₹67 lakh overseas tuition transfer. If eligible self-funded education remittances are her only LRS use in the tax year, the first ₹10 lakh is below the TCS threshold and the excess ₹57 lakh attracts 2% TCS under the 2026 law: ₹1.14 lakh. Her total cash needed for the bank transaction is ₹68.14 lakh if the principal remittance is ₹67 lakh. The USD value depends on the exchange rate and fees on the transaction day; “₹67 lakh equals US$80,000” is a dated assumption rather than a permanent conversion.
TCS is not the limit
The 2026 TCS rate for education/medical remittances above the ₹10 lakh threshold is 2%; other eligible LRS purposes can face 20% above that threshold. Overseas tour packages are a separate seller-collected 2% category with no ₹10 lakh floor. Education funded by a specified financial-institution loan has an exemption. The Income Tax Act 2025 as amended by Finance Act 2026 and an official bank implementation table distinguish the cases.
Check permitted purpose and documentation
An LRS transfer still needs an authorised dealer, identity/PAN details, purpose declaration and any required source-of-funds or foreign-investment compliance. TCS is usually credited in the income-tax account and may be applied against liability or refunded after filing, but processing timing is not guaranteed. If Ananya has already sent funds through another bank this year, the dealer must use her aggregate LRS/TCS position, not reset it for this remittance.
