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Liberalised Remittance Scheme (LRS): What you need to know

Residents of India can use the LRS to remit up to USD250,000 per financial year.

What is the Liberalised Remittance Scheme?

The Liberalised Remittance Scheme (LRS) is part of the Foreign Exchange Management Act (FEMA) 1999 which lays down the guidelines for outward remittance from India. Under LRS, all resident individuals, including minors, are allowed to freely remit up to USD250,000 per financial year (April – March). This can be for any permissible current or capital account transaction, or a combination of both.

A few key things to keep in mind while remitting money abroad

  • If you are a resident individual, you and your family (including minors) can remit up to USD250,000 per individual, per financial year.
  • You cannot remit funds abroad for prohibited purposes like buying lotteries or banned magazines, amongst others.
  • There is no restriction on the frequency or number of transactions during a financial year. However, the total amount of foreign exchange remitted through all sources in India under LRS during the current FY should be within the LRS limit as specified by the Reserve Bank of India (RBI).

Benefits of remittance under LRS in India

The Liberalised Remittance Scheme enables residents of India to remit up to USD250,000 per financial year for the following purposes:

  1. Studies abroad
    As an Indian student, you can use the LRS to pay for your education expenses abroad, including tuition fees, accommodation, and other related costs. This gives you access to international learning environments.
  2. Travel and tourism
    Meet your travel expenses, including airfare, accommodation, and other travel-related costs, through the LRS. It's easier to use foreign currency for leisure travel, business trips, medical tourism, and attending conferences or events abroad. You can also use the LRS for travelling for business, a conference or training; meeting medical expenses or a check-up abroad; going with a patient for medical treatment overseas; or visiting any country except Nepal and Bhutan.
  3. Medical treatment
    You can meet the cost of your medical treatment or procedures abroad, getting access to advanced healthcare facilities, specialised treatments, and consultations with international doctors.
  4. Family support
    The LRS allows you to provide financial support for close relatives residing outside India, helping them meet their living expenses and ensuring their well-being.
  5. Going overseas to work
  6. Emigration
  7. Donations or gifts
  8. Any other current account transaction that does not fall under the definition of current account (FEMA 199)

As regulations can change, please refer to the RBI website for the most up-to-date information.

What is not permitted under the LRS?

You cannot use the LRS to send money:

  • For any prohibited activities such as margin trading or the lottery
  • To buy Foreign Currency Convertible Bonds issued by Indian companies in the overseas secondary market
  • To trade in foreign exchange abroad
  • Directly or indirectly to individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the RBI to the banks

A resident individual cannot transfer money as a 'gift' or 'loan' from a domestic account to a non-resident ordinary (NRO) account[@article-lrs-loan] using the HSBC India Mobile Banking App or Personal Internet Banking. These types of transactions need to be reported under the LRS scheme. If you need to make any such transfers, please reach out to your branch for assistance.

In addition, there may be times when you cannot use the LRS to make capital account remittances directly or indirectly to countries identified by the Financial Action Task Force as 'Non co-operative countries and territories'.

More FAQs about the Liberalised Remittance Scheme

What if I need to remit more than USD250,000?

You can remit more than the USD250,000 limit for emigration, medical treatment and overseas education, if it is required by the country of emigration, medical institute offering treatment or the university respectively. However, this is subject to certain conditions. In other cases, you will need prior permission from the RBI to remit anything above USD250,000.

Can I only send US dollars? 

No, you can make your remittance in any freely convertible foreign currency.

How many remittances can I make in a financial year?

As long as your transactions do not exceed the USD250,000 limit, there are no restrictions on the number of remittances you can make. 

Can a minor send money under the LRS?

All residents of India, including minors, can use the LRS. However, the minor's parent or guardian must sign Form A2.

For further information, you can refer to our LRS FAQs.

Make LRS remittance through HSBC

If you're an HSBC customer and resident of India, you can conveniently place a request for an LRS transfer through:

Enjoy international payments that are convenient, fast and fee-free.

HSBC Premier customers can reach out to their Relationship Manager for any assistance.

Download the HSBC Liberalised Remittance Scheme (LRS) application here.

 

Open an HSBC Premier bank account

Enjoy personalised banking with access to the widest global network and wealth management expertise.

Terms and conditions apply.
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