Sending money out of India — the rules for NRIs and residents

Two different worlds

The rules for sending money out of India split cleanly into two groups:

NRIs move money out of their NRE, FCNR, and NRO accounts using facilities specifically designed for non-residents. NRE and FCNR are freely repatriable; NRO is capped at USD 1 million per financial year after tax.
Indian residents move money out under the Liberalised Remittance Scheme (LRS) — a single USD 250,000 per financial year envelope covering almost all permissible outward purposes.

The old regime — which had separate small sub-limits for tourism, business trips, medical, and education — is gone. Today it is LRS or nothing for residents, and the three NRI account rails for NRIs.

All outward remittances, whichever bucket they fall in, flow through an authorised dealer (a bank licensed by RBI). Informal channels like hawala are a FEMA contravention and carry serious penalties under both FEMA and the Prevention of Money Laundering Act.

For NRIs

NRE — freely repatriable

Any balance in an NRE savings, current, or fixed deposit account can be remitted abroad by the account holder at any time, in any amount, without per-year caps. The bank converts from rupees to the destination currency at the prevailing rate and sends by SWIFT. No Form 15CA/15CB is needed for NRE outward transfers because the funds originated from foreign inflows.

NRE balances can also be accessed abroad through:

International debit cards linked to NRE savings — usable at ATMs and for point-of-sale purchases worldwide.
Own-bank remittance apps — ICICI Money2India, HDFC QuickRemit, SBI GlobalEase, and others — often cheaper than pure SWIFT for smaller transfers.

FCNR(B) — freely repatriable

FCNR(B) foreign-currency fixed deposits can be remitted abroad at maturity (or on premature closure, subject to the bank's terms) without any per-year cap. Since the deposit is already in foreign currency, no FX conversion is needed at remittance.

NRO — capped at USD 1 million per financial year

NRO balances — comprising Indian-source income (rent, dividend, pension), sale proceeds of Indian property, inheritance, current income — are remittable up to USD 1 million per financial year per person, after Indian taxes have been paid.

The USD 1 million window covers all NRO sources combined — including the proceeds of property sale, so the old rule requiring property to be held for ten years before repatriation no longer applies.

Documents required for NRO repatriation

Form A2 — outward remittance declaration signed at the bank.
Form 15CA — four-part online self-declaration on the income-tax portal; the part used depends on the amount and taxability.
Form 15CB — CA certificate, required for taxable remittances above monetary thresholds (broadly, more than ₹5 lakh in a year where tax is payable on the amount being remitted).
Underlying proof of the source — sale deed for property, rent agreements and rent receipts, dividend warrants, probate for inheritance, salary slips for employment income, and proof of tax paid (challans or Form 16A).

Repatriation restrictions by nationality (property sale)

The USD 1 million facility for NRO balances arising from sale of immovable property in India is not available to citizens of: Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, and Bhutan. Such citizens need specific RBI approval for property-sale repatriation.

Agricultural land, plantations, farmhouses

Sale proceeds of agricultural land, plantation property, or a farm house held by an NRI are not part of the normal USD 1 million facility — specific RBI approval is required.

For Indian residents — the LRS

What LRS covers

LRS gives every resident individual (including minors, through a guardian) up to USD 250,000 per financial year (April–March) for any permissible outward remittance, aggregated across all purposes and all authorised dealers. Permissible purposes include:

Travel and tourism.
Business trips.
Medical treatment and attendant expenses.
Education abroad — tuition and maintenance.
Employment or emigration incidental expenses.
Gifts and donations to non-residents.
Maintenance of close relatives abroad.
Investment in foreign securities, mutual funds, ETFs.
Purchase of immovable property abroad.
Holding foreign-currency bank accounts outside India.

What LRS does not cover

Prohibited purposes under Schedule I of the FEM (Current Account) Rules — lottery winnings, lottery tickets, banned magazines.
Restricted purposes under Schedule II — cultural tours and certain specific cases need prior Government/RBI approval.
Remittances for immigration-scheme eligibility — money sent abroad to earn points or meet investor-visa thresholds needs prior RBI approval.
Margin and margin-call remittances to overseas exchanges for forex/commodity trading.
Remittances to FATF non-cooperative jurisdictions or entities on RBI/UN sanctions lists.
Direct remittances to Nepal and Bhutan (these are rupee-settled neighbours; different rules apply).

Per-person, not per-family

Each family member has their own USD 250,000. A household structuring a foreign property purchase can pool LRS limits of adult members (and minors, via guardians) to fund a larger outflow.

TCS on LRS — the cash-flow tax

Since 1 October 2023, Tax Collected at Source applies on LRS remittances. Rates depend on purpose and amount, per Section 206C(1G) of the Income-tax Act:

Purpose	TCS rate
Education funded by an education loan	0.5% on amount above ₹7 lakh per FY
Education (self-funded) and medical treatment	5% on amount above ₹7 lakh per FY
Overseas tour packages (incl. via Indian tour operators)	5% up to ₹7 lakh; 20% above
All other LRS remittances	Nil up to ₹7 lakh; 20% above ₹7 lakh

TCS is not a tax you ultimately pay — it's collected upfront and credited against your final annual tax liability, with any excess refunded when you file your return. Budget for the cash drain during the year, and keep the TCS certificate (Form 27D) issued by the bank.

Documents needed for LRS

PAN — mandatory; banks aggregate your year-to-date LRS usage by PAN.
Form A2 outward remittance declaration.
Purpose code selected from the RBI master list (education, medical, gift, travel, overseas investment, etc.).
Supporting documents appropriate to the purpose — tuition invoice, offer letter, medical estimate, property agreement, etc.
For investments in foreign securities, the bank also captures details for Schedule FA reporting the following year.

Form 15CA/15CB is not typically needed for LRS outward transfers — it applies to NRO repatriation. The bank's Form A2 handles the declaration side for residents.

Alternative routes

GIFT City / IFSC

The International Financial Services Centre (IFSC) at GIFT City, Gandhinagar is a designated zone treated like an offshore jurisdiction for some purposes. Residents can use LRS to remit funds to IFSC banking units (IBUs) to invest in dollar-denominated instruments (mutual funds, bonds, deposits) without physically moving money outside India. Useful for residents who want foreign-currency exposure without cross-border friction.

Corporate ODI (for companies and LLPs, not individuals)

Indian companies invest abroad under the Overseas Direct Investment (ODI) regime, which is separate from LRS. ODI has its own limits (broadly, 400% of net worth, subject to conditions) and its own reporting (Form FC, now integrated in the FEMA master direction on overseas investment, 2022). Outside the scope of this article, but worth knowing it exists.

Inward credits of foreign currency (not repatriation)

Residents with legitimate foreign-currency earnings (consultants, freelancers, exporters) can hold foreign currency in EEFC accounts rather than convert. Returning NRIs use RFC accounts. Both are covered in our foreign-exchange rules article.

Mechanics at the bank

The physical workflow for an outward remittance, whether NRO or LRS:

Choose the authorised dealer — typically your primary Indian bank, though any AD bank can process.
Submit Form A2 with beneficiary details: name, full address, bank name, SWIFT / BIC code, account number, and IBAN if the destination is EU/UK.
Attach supporting documents appropriate to the purpose — for NRO, tax proofs and 15CA/15CB; for LRS, purpose-specific papers.
Pay the rupee equivalent plus the bank's remittance commission and any applicable TCS.
SWIFT wire is sent; credit at the destination typically within 1–3 business days depending on correspondent banking.
Keep the outward remittance advice issued by the bank — useful for later reference (especially for investment source-of-funds questions abroad) and for your next year's Schedule FA filing.

Common mistakes

Mixing NRE and NRO for repatriation. NRE is free; NRO is capped. Don't assume both work the same way.
Forgetting 15CA/15CB for NRO outward transfers. Banks will refuse to remit without them for taxable items.
Assuming the old sub-limits (tourism USD 10k, business USD 25k) still exist separately. They were consolidated into LRS years ago. Whatever you remit counts against the single USD 250,000 annual envelope.
Not budgeting for TCS on large LRS remittances. A ₹1 crore property down-payment abroad attracts ~₹19 lakh of TCS that needs to be funded up front.
Under-the-radar channels. Hawala and informal remitters are a FEMA offence and, increasingly, a PMLA offence. Don't route through them, no matter how small the saving on the FX spread.
Missing Schedule FA the following year. Every foreign asset acquired via LRS must be reported in the ITR the following year once you become ROR; non-reporting carries penalties under the Black Money Act.

Bottom line

For NRIs: NRE and FCNR balances leave India at will; NRO balances leave within a USD 1 million annual window and a Form 15CA/15CB paper-trail. For residents: LRS is a single USD 250,000 annual envelope for almost every legitimate foreign-currency need, with TCS collected upfront and reconciled in your return. Everything else — hawala, unlimited credit-card spend abroad, schemes promising "no-TCS" workarounds — is a FEMA risk you don't want.