LRS Quick Facts
- $250,000 per person per year (₹2.08 crore at ₹83.33/USD)
- Resets April 1 every financial year
- TCS threshold: ₹7 lakh—5% TCS above this (refundable)
- Family maximization: Husband + wife + 2 kids = $1M collective
- No rollover: Unused limit doesn't carry forward
- Returning money: Doesn't consume fresh LRS limit
Understanding the $250K Limit
$250,000 = ₹2.08 crore (at USD/INR = ₹83.33)
This is your annual quota for ALL foreign remittances combined.
What Counts Toward LRS:
- Foreign stock investments (Tesla, Nvidia, Palantir)
- Foreign education (tuition + living expenses)
- International real estate purchases
- Medical treatment abroad
- Travel expenses (if remitted in advance)
- Gifts to foreign relatives/friends
- Maintenance of family abroad
- EMI payments on foreign loans
What DOESN'T Count:
- International credit card spends while traveling (separate limit)
- Business payments (covered under separate rules)
- Remittances by NRIs from NRE accounts
- Money returning to India (reverse remittance)
Real-World Scenario:
You send $60K for child's US education in August.
You have $190K left for
stock investments that financial year.
If you try to invest $200K → Blocked by bank
(LRS violation)
Contrarian Take
Everyone's worried about Meta's metaverse spending. They should be. But what they miss is that Meta's AI advertising engine is so far ahead, they can burn $10B yearly on moonshots and still dominate.
Maximizing LRS for Stock Investing
Strategy 1: Year-End/Year-Start Split
March 2026: Invest ₹17 lakh ($204K)
April 2026: Invest ₹17 lakh
($204K)
Total deployed in 30 days: ₹34 lakh
Perfect for lump-sum deployment without multi-year waiting.
Strategy 2: Family Pooling
Each family member gets individual $250K limit:
- You: $250K
- Spouse: $250K
- Child 1 (minor—parent as custodian): $250K
- Child 2 (minor): $250K
- Total family LRS capacity: $1 million/year
Deploy ₹8.3 crore annually into Bro Billionaire Stocks.
Strategy 3: Front-Load Early in FY
Invest in April-May instead of March:
- Benefit: 12 months for stocks to compound before next withdrawal decision
- Benefit: More time to plan next year's allocation
- Downside: Miss potential returns if you wait
Strategy 4: Use 90% Rule
Keep 10% buffer for emergencies:
- LRS limit: $250K
- Invest: $225K in stocks (April-June)
- Reserve: $25K for education/medical/travel
Prevents violation if unexpected foreign expense arises.
How to Track Your LRS Usage
Method 1: Annual Information Statement (AIS)
Best official method:
- Login to Income Tax portal
- Go to "Annual Information Statement" (AIS)
- View "Foreign Remittance Information" section
- Shows all LRS transactions with dates, amounts, banks
Update frequency: Monthly (with 1-month lag)
Method 2: Bank Records
Request LRS utilization certificate from your bank:
- Shows remittances processed through that specific bank
- Limitation: Doesn't show remittances via other banks
Method 3: Personal Spreadsheet
Maintain your own tracker:
| Date | Purpose | Amount (USD) | Cumulative | Remaining |
|---|---|---|---|---|
| Apr 15, 2026 | Stock investment | $50,000 | $50,000 | $200,000 |
| Aug 10, 2026 | Child education | $30,000 | $80,000 | $170,000 |
| Dec 5, 2026 | Medical | $10,000 | $90,000 | $160,000 |
Pro Tip: Reconcile with AIS quarterly to catch discrepancies early.
TCS (Tax Collected at Source) Strategy
TCS Rules 2026:
- First ₹7 lakh: Zero TCS
- ₹7L - ₹20.8L: 5% TCS
- Above ₹20.8L ($250K): No additional remittance allowed
How TCS Works:
Example: You remit ₹12 lakh
- ₹7L: No TCS
- ₹5L: 5% TCS = ₹25,000 deducted
- Effective remittance: ₹11.75L converted to USD
- ₹25K gets credited to your PAN—claim in ITR
TCS Minimization Tactics:
Tactic 1: Split Across Financial Years
Instead of ₹15L in one FY:
- March: ₹7L (no TCS)
- April: ₹7L (no TCS)
- Save: 5% of ₹8L = ₹40,000 in TCS
Tactic 2: Use Multiple Family Members
Each gets ₹7L TCS-free threshold:
- You: ₹7L (no TCS)
- Spouse: ₹7L (no TCS)
- ₹14L remitted, zero TCS collected
Tactic 3: Timing Optimization
If you're close to ₹7L in November:
- Stop new remittances
- Wait until April: fresh ₹7L TCS-free quota
- Saves 5% on next tranche
TCS is NOT a Tax—It's Refundable
Many investors fear TCS. Don't.
TCS = advance tax collection. You claim full refund if final tax liability is lower.
Example: TCS collected = ₹50K. Your actual tax = ₹20K. Refund = ₹30K.
Returning Money to India
Good News: Reverse Remittances Don't Count Against LRS
You can bring money back to India anytime without consuming your $250K quota.
Example:
- April 2026: Send $200K to US broker
- June 2026: Sell stocks, withdraw $150K back to India
- August 2026: Send $100K again
- Total outward: $300K (but only $150K net when counting returns)
- LRS consumed: Still $200K (initial) + $100K (new) = Violation alert!
Clarification: Only Outward Remittances Count
In above example, you violated LRS by sending $300K total outward, even though $150K came back.
Rule: Each outward remittance counts, regardless of returns.
Repatriation Process:
- Sell stocks in US broker account
- Request withdrawal via broker app
- Broker converts USD → INR
- Money hits your Indian bank (3-5 days)
- Report in ITR: Capital gains, forex gains
Multi-Year LRS Strategies
Strategy: Build $1M US Portfolio Over 5 Years
Goal: Invest $200K/year in Bro Billionaire Stocks
| Year | Invest | Portfolio Value (assuming 15% CAGR) |
|---|---|---|
| 2026 | $200K | $200K |
| 2027 | $200K | $430K |
| 2028 | $200K | $695K |
| 2029 | $200K | $1.0M |
| 2030 | $200K | $1.35M |
By 2030: Invested $1M, portfolio worth $1.35M (assuming 15% annual returns)
Strategy: Aggressive Front-Loading
If you have large capital available now:
- Year 1: Max out $250K (you + spouse = $500K)
- Year 2: Max out $500K again
- Year 3: Add kids' limits = $1M deployed
- Total in 3 years: $2M
Let compound for 5-7 years → Generational wealth.
Common LRS Mistakes
Mistake #1: Not Tracking Mid-Year
You remit $120K in May, $140K in September → Violation (total $260K).
Fix: Check AIS every month.
Mistake #2: Using Multiple Banks to "Hide" Usage
Some think using 3 banks = 3 separate limits. Wrong. RBI consolidates everything via PAN.
Mistake #3: Assuming Returns Free Up Limit
"I brought back $100K, so I have $100K fresh limit" → No. Limit resets only on April 1.
Mistake #4: Not Planning for TCS
Remit ₹12L, don't realize ₹25K TCS reduces actual investment by 2%+.
Mistake #5: Ignoring Family Limits
Your spouse has unused $250K—use it! Combined planning = double capacity.
The LRS Power User's Checklist
- Track usage monthly via AIS
- Plan year's full foreign expenses in April
- Optimize TCS by staying under ₹7L or splitting years
- Use family pooling for large deployments
- Front-load investments early in FY
- Keep 10% buffer for emergencies
- Never violate—penalties are brutal
Master LRS = Master global wealth building.