Global investing · Guide
LRS: limits, costs, and TCS
The $250,000 per financial year cap, what banks and brokers charge on top of the FX spread, and how tax collected at source (TCS) on high remittances shows up later.
The limit (and what counts)
Under LRS, a resident individual may remit up to USD 250,000 per financial year (April–March) for permitted current or capital account transactions, including overseas direct investment.
The limit is per person, not per account. Education, travel, and gifts abroad also consume the same bucket. Track the total across all banks and brokers.
Minors have their own LRS cap in practice through a guardian; family pooling to evade limits is not permitted.
Where the money goes on each remittance
FX spread: Banks quote a rupee rate worse than the interbank mid — often 0.25%–1% for retail, wider for small tickets. Brokers with bundled FX may show “commission free” but embed spread.
Outward remittance charges: Many banks charge a flat fee (roughly ₹500–₹1,500) plus GST per SWIFT transfer. Some fintech stacks absorb this on larger tickets.
GST: Currently 18% on the bank’s service charge component (not on the full remitted amount).
Correspondent fees: Occasionally a small intermediary fee is deducted in USD before credit to your US broker.
Ongoing US costs: SEC/FINRA pass-through, ADR custody fees on some names, and bid–ask on ETFs.
TCS on LRS (high level)
If you remit for overseas tour packages or other non-education/medical LRS purposes, TCS may apply once aggregate LRS outflows cross thresholds set in the Finance Act (rates and thresholds change — verify for the year you remit).
For remittances specifically for overseas investment, rules have shifted across budgets; your bank will deduct TCS if applicable and issue a certificate.
TCS is not extra tax by default — it is collected upfront and can usually be adjusted against your final income-tax liability or claimed as credit when you file, subject to your CA’s reading of your facts.
Keep Form 26AS / AIS and bank certificates; mismatches trigger notices.
How to compare platforms fairly
Ask for an all-in quote on ₹5 lakh: rupees debited, USD credited, time to settle, and whether you can repatriate dividends back to India easily.
Check outbound and inbound: selling US stock and bringing money home is a second FX leg with its own spread.
For recurring SIPs, prefer auto-debit only after you have verified annual LRS headroom.