Transferring Money Abroad: Ways of Sending & Things to Know
Outward remittances from India operate under the Liberalised Remittance Scheme (LRS) — up to USD 250,000 per resident individual per financial year, across all banks combined. This guide covers the Tax Collected at Source (TCS) framework as of mid-2026: a ₹10 lakh annual threshold (per PAN, across all LRS remittances) below which no TCS applies, and — following Finance Act 2026 changes effective 1 April 2026 — a reduced 2% TCS rate (down from 5%) on medical/education/travel remittances above this threshold, and 2% with no threshold at all for overseas tour packages (down from a 5%/20% structure); education funded via a qualifying education loan remains NIL-TCS. We flag that “other” LRS purposes like investments and gifts may continue to attract 20% TCS above ₹10 lakh — worth confirming, as the April 2026 reductions appear targeted at medical/education/travel specifically. We cover the sending channels (SWIFT wire transfer, online remittance platforms, forex cards, foreign-currency demand drafts), Form A2 and purpose codes, the often-overlooked exchange rate markup as a hidden cost, and intermediary/correspondent bank charges (OUR vs SHA) that can reduce the amount a recipient actually receives on SWIFT transfers.