LRS — the $250K/year rule

What is LRS?

The Liberalised Remittance Scheme (LRS) is an RBI programme that allows each resident Indian individual to remit up to $250,000 per financial year (April–March) abroad — for investments, education, travel, medical treatment, or maintaining a foreign bank account. For US stocks, LRS is the legal channel through which rupees leave India, get converted to USD, and land in your US brokerage account.

The $250,000 limit is per person, per year. A family of four can remit up to $1 million/year in total, each using their own individual LRS quota.

TCS (Tax Collected at Source) on LRS

From October 1, 2023, Tax Collected at Source (TCS) applies on LRS remittances for investment purposes. Your bank deducts TCS at source before completing the remittance. TCS is not a final tax — it's credited against your income tax liability when you file your return. But it is a liquidity cost: money leaves your account, and you get it back when you file.

TCS rates changed in Budget 2023 — confirm the current applicable rate with your bank before remitting, as it may differ by purpose (education vs investment) and remittance amount. Banks are required to state the TCS rate applied on every LRS remittance receipt.

Step-by-step: how the remittance flow works

• 1
  Open your platform account first. Vested, INDmoney, Stockal, or IBKR India — complete KYC and W-8BEN (the form that certifies you're not a US person). You'll receive a US brokerage account number.
• 2
  Initiate the remittance from your Indian bank. Log into your bank's NetBanking or app → find "Outward Remittance / LRS" → select "Investment" as purpose → enter the amount in USD → enter the beneficiary details (your US brokerage account).
• 3
  Bank collects TCS. Deducted automatically from your account at the applicable rate on the remittance amount. You'll receive a TCS certificate (Form 27D) — keep it for your ITR filing to claim the credit.
• 4
  Funds arrive in 2–3 business days. USD lands in your US brokerage account. You can start buying US stocks, ETFs, or fractional shares immediately.
• 5
  For large amounts: Form 15CA / 15CB. For remittances above ₹5 lakh (per transaction, in most cases), you'll need to file Form 15CA (self-declaration online) and get Form 15CB from a CA. Some banks handle this within their platform; others require you to file separately. Confirm with your bank.

Banks that support LRS for US stock investing

Most major Indian banks support LRS for investment remittances. The ones with the cleanest in-app / NetBanking flow:

Getting money back out

Sell your US stocks on the platform → funds settle in your USD brokerage account (T+1 for US stocks) → initiate a withdrawal back to India → money arrives in your Indian bank account as INR at the prevailing exchange rate. Total cycle: typically 5–7 business days from sale to INR in your account. Most platforms allow unlimited withdrawals; some charge a small fee per withdrawal.

Common mistakes

• Wrong financial year timing: LRS quota resets on April 1. If you've used most of your $250K quota and want to remit more, wait until the new financial year starts.
• Not tracking cumulative LRS: The $250K limit applies across ALL LRS purposes (travel, education, investment). If you've remitted $50K for education, you only have $200K left for investment that year.
• Using NRO/NRE accounts for LRS: LRS is for resident accounts only. NRO and NRE accounts are non-resident accounts — LRS remittance from them is not permitted.
• Skipping TCS credit on ITR: TCS deducted on LRS is fully creditable against your income tax liability. Forgetting to claim it in your ITR means you effectively overpay tax.