If you’re an Indian resident looking to send money abroad, you must follow India’s outward remittance rules under the Liberalized Remittance Scheme (LRS) set by the Reserve Bank of India (RBI). Whether you’re funding a child’s education, investing overseas, or sending money to family, knowing the limits, taxes, and procedures is crucial.
Here’s everything you need to know about outward remittances from India.
1. What is Outward Remittance?
Outward remittance refers to sending money from India to a foreign country for purposes like:
✔ Education expenses 🎓
✔ Medical treatment abroad 🏥
✔ Investment in foreign stocks, real estate, bonds 📈
✔ Gifts or maintenance to family members abroad 💰
✔ Travel & living expenses ✈️
✔ Subscription to foreign services (Netflix, Spotify, etc.)
In India, most outward remittances fall under the Liberalized Remittance Scheme (LRS), which allows residents to remit up to $250,000 per financial year (April-March).
2. Liberalized Remittance Scheme (LRS) Rules
✔ Annual Limit: $250,000 per person per financial year
✔ Eligible Persons: Resident Indians, including minors (via guardian)
✔ Eligible Transactions: Personal expenses, education, investments, medical, travel, etc.
✔ Prohibited Transactions: Crypto transactions, lottery, gambling, etc.
🔹 LRS is not available for NRIs. Only Indian residents can remit funds under this scheme.
3. Tax Collected at Source (TCS) on Outward Remittances
From October 1, 2023, the Indian government introduced TCS (Tax Collected at Source) on outward remittances under LRS.
| Purpose of Remittance | TCS Rate (Up to ₹7 lakh/year) | TCS Rate (Above ₹7 lakh/year) |
|---|---|---|
| Education (with loan) | 0% | 0.5% |
| Education (self-fund) | 0% | 5% |
| Medical Treatment | 0% | 5% |
| Other Expenses (Travel, Gifts, etc.) | 0% | 20% |
| Investments (Stocks, Real Estate, Bonds, etc.) | 0% | 20% |
✔ TCS is refundable when you file an Income Tax Return (ITR).
4. How to Send Money Abroad from India?
Step 1: Choose Your Remittance Provider
🔹 Banks (SBI, HDFC, ICICI, Axis, etc.)
🔹 Online remittance platforms (Wise, Western Union, etc.)
🔹 Forex dealers & financial institutions
Step 2: Submit Required Documents
📄 PAN Card (Mandatory for LRS)
📄 A2 Form (Declaration of remittance purpose)
📄 Bank KYC (ID & Address Proof)
Step 3: Fund Your Transfer & Complete the Transaction
✔ Transfer funds via your bank’s NRE/NRO or savings account
✔ Pay applicable GST, TCS, and bank charges
✔ The bank processes the transaction & provides a SWIFT confirmation
5. How Long Does It Take to Remit Money from India?
✔ Bank Wire Transfers: 1–3 business days
✔ Online Platforms: Same day to 2 days
✔ Forex & Money Transfer Services: Varies by provider
🔹 Exchange rates & charges differ between providers—compare before sending!
6. FAQs on Outward Remittances from India
1. Can NRIs send money abroad from India?
❌ No, NRIs cannot remit funds under LRS. They must use NRO accounts (subject to RBI repatriation rules).
2. Is there a limit on the number of outward remittances per year?
✅ No, you can send multiple remittances as long as they don’t exceed $250,000 annually.
3. What happens if I send more than $250,000 in a year?
🚧 Any remittance beyond the LRS limit requires RBI approval.
4. Do I need to file taxes on money sent abroad?
✅ Only TCS applies; you can claim a refund when filing ITR.
5. Which is the cheapest way to send money abroad from India?
💰 Online remittance platforms (like Wise) usually offer better exchange rates than banks.
7. Final Thoughts: Things to Keep in Mind
✔ Know your limit: Max $250,000/year under LRS
✔ Factor in TCS: Refundable via ITR filing
✔ Compare providers: Check exchange rates & charges before remitting
✔ Keep documents ready: PAN, A2 Form, ID proof
🚀 Outward remittances are easier than ever, but understanding the rules helps you save on taxes and fees!
