Summary: Discover how Indian residents can invest abroad under the Liberalized Remittance Scheme (LRS). Learn about limits, taxation, permissible investments, and why to remit money overseas with BookMyForex.
Are you an Indian resident eager to expand your horizons and seize opportunities in foreign stocks and property abroad? Look no further! The Reserve Bank of India’s Liberalized Remittance Scheme (LRS) allows you to transfer funds abroad for various purposes including investments abroad.
However, to ensure a seamless foreign remittance experience and maximize the efficiency of overseas investments, it is imperative that you familiarize yourself with key aspects such as LRS limits, taxation rules, necessary documentation, and other regulatory requirements while sending money abroad to invest in stocks and real estate.
What Is Liberalised Remittance Scheme (LRS)?
The Liberalized Remittance Scheme (LRS) permits Indian residents to remit up to USD 2,50,000 per financial year for permitted current and capital account transactions. This amount covers investments, education, medical expenses, travel, and more.
1. No RBI Approval Required: Individuals can remit funds without needing prior RBI approval.
2. Multiple Transactions Allowed: While there is no restriction on the number of transactions, the total remitted amount cannot exceed the USD 2,50,000 limit per financial year.
3. TCS Applicability: Tax Collected at Source (TCS) may be applicable based on the remittance amount and purpose (explained below).
What are the Permissible Investment Options Under LRS for Indians?
Investments in stocks, real estate, and various other types of overseas investment options are categorized as capital account transactions. As per the Liberalized Remittance Scheme (LRS), only specific capital account transactions are allowed. These include:
1. Foreign Real Estate: Purchase of residential or commercial properties overseas.
2. Stock Market Investments: Buying shares, securities, ETFs, mutual funds, and bonds in foreign markets.
3. Business Expansion: Establishing Wholly-Owned Subsidiaries (WOS) or Joint Ventures (JV) abroad for legitimate business activities.
4. Alternative Investments: Other permissible foreign assets and instruments.
What is Not Permitted as an Overseas Investment Under LRS?
The Liberalised Remittance Scheme (LRS) does not allow Indians to invest abroad for the following purposes:
1. Sending funds for prohibited activities, such as margin trading, lottery, and similar activities
2. Remittance for purchase of foreign currency convertible bonds issued by Indian companies in the overseas secondary market
3. Remittance for trading in foreign exchange abroad
4. Capital account remittances, directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “Non-co-operative countries and territories”, from time to time
5. Remittance directly or indirectly to those individuals and entities identified as posing a significant risk of committing acts of terrorism as advised separately by the RBI to the banks
Are There Any Tax Obligations for Investment Abroad?
1. TCS (Tax Collected at Source) Under LRS
According to the new budget 2025, the Tax Collected at Source (TCS) threshold under LRS has been increased from ₹7 lakh to ₹10 lakh. From April 2025 onwards, no TCS is applicable under ₹10 lakh, and a 20% TCS is levied on all remittances for investment abroad above Rs 10 lakh under the RBI’s Liberalized Remittance Scheme (LRS). However, individuals can claim a refund for the TCS deducted when filing their income tax return (ITR).
In the case of profits earned from foreign investments made under the Liberalised Remittance Scheme (LRS), the taxation in India depends on the duration for which the investment was held. If the investment was held for 24 months or more, it is subject to a long-term capital gains tax of 20%. Otherwise, gains from these investments are treated as regular income and taxed according to the applicable income tax slabs.
2. Capital Gains Tax on Foreign Investments
The taxation of profits earned from foreign investments depends on the holding period:
1. Short-Term Capital Gains: If the investment is held for less than 24 months, gains are taxed as per the investor’s income tax slab.
2. Long-Term Capital Gains: Investments held for more than 24 months are subject to a 20% tax with indexation benefits.
Why BookMyForex is the Best Platform to Remit Money Abroad
Whether you’re an investor eyeing international stock markets to diversify your portfolio or an individual with dreams of buying property overseas, look no further – BookMyForex has got you covered.
BookMyForex provides a fast and easy way to send money abroad to 150+ countries. We offer remittance services at extremely discounted rates and with zero transfer charges, so you end up saving up to 5% over standard bank rates.
1. Live, Transparent Rates: Gets updated every 3 seconds
2. Zero Transfer Charges: Use promo code: ZEROBANKFEE
3. Convenient & Hassle-Free Process: 24×7 Online Booking Option
4. Safe & Secure Transfer: Funds transferred via reputed banks
5. Reliable Remittance Service: Takes up to 48 Hours
6. Book Now & Pay Later: Freeze desired rates for up to 3 days
7. Excellent Customer Support: On-call and online customer assist service
Final Thoughts
In a nutshell, Indian residents can leverage the Liberalized Remittance Scheme (LRS) to invest in foreign stocks and property abroad. And when it comes to sending money abroad for this purpose, BookMyForex is your reliable companion. The order booking process is as simple as 1-2-3, offering a quick, secure, and cost-effective way to invest money abroad. So, why wait? Dive into the world of global investments and see your financial horizons expand like never before!
About the Author
Bhawna Nijhawan is the Content Manager at BookMyForex and the go-to person for creating engaging, informative content that resonates with the platform’s diverse audience. With over 8 years of experience in content writing and more than 4 years in the forex industry, she knows exactly how to simplify complex forex topics into something everyone can relate to.
