RBI’s Liberalised Remittance Scheme

Union Budget 2026 cuts the Tax Collected at Source (TCS) rate for education and medical expenses abroad under the RBI’s Liberalised Remittance Scheme (LRS). TCS is collected at the time of sale for specific goods/services under Section 206C of the Income Tax Act, 1961, making LRS-linked remittances currently relevant.

RBI’s Liberalised Remittance Scheme (LRS):

Dimension	Key Details
Tax provision	TCS comprises an additional tax collected by sellers from buyers at the time of sale for specific goods/services under Section 206C of the Income Tax Act, 1961.
Eligible persons	Authorises all resident individuals (including minors) to remit funds within the scheme limit.
Remittance limit	Provides for remittance up to USD 2,50,000 per financial year.
Permitted transactions	Applies to permissible current account transactions or capital account transactions or a combination of both.
Not available to	Not available to corporates, partnership firms, Hindu Undivided Family (HUF), trusts.
Introduced by	Introduced in 2004 by the Reserve Bank of India (RBI).
Prohibited items	Prohibits gambling and lottery, trading and speculation.