Definition
The RBI scheme that lets a resident Indian send or spend up to USD 250,000 abroad each financial year for travel, education, medical treatment, gifts and investment. Holiday forex, forex card loads and overseas tour payments all count towards it.
How LRS works
Every resident individual, including minors, can remit up to USD 250,000 (about ₹2.2 crore) per financial year, April to March. Travel is one of several permitted purposes, alongside studies, medical treatment, maintenance of relatives, gifts and overseas investment. Each LRS transaction needs your PAN and goes through an authorised bank or money changer, who completes Form A2 with you.
What counts as LRS on a holiday
- Buying foreign currency notes for a trip
- Loading a forex card
- Paying an Indian operator for an overseas tour package
- Paying a foreign hotel or tour company directly by bank transfer
- Spending abroad on an Indian debit card
At the time of review, overseas spends on Indian credit cards are not counted under LRS for TCS purposes, though banks still report them.
Cash limits
You can carry up to USD 3,000 (or its equivalent) in foreign currency notes per trip; the rest should be on a forex card or another non-cash instrument. A few destinations have different limits.
Example
A Mumbai couple each load ₹2.5 lakh on forex cards for a Japan trip, and later pay ₹4 lakh for a Europe tour. All of it counts towards their LRS limits, which are nowhere near USD 250,000. It matters for TCS, though: the tour attracts 2%, while the forex card loads stay under each person's ₹10 lakh TCS threshold.
Practical advice
Buy travel forex in the name of the person actually travelling. If you are also funding a child's education abroad, keep a running total for the year, since all LRS remittances count together for the TCS threshold.
Our foreign exchange service handles LRS paperwork for travel forex.