When Capitalmind founder Deepak Shenoy argued on 6 November that India should stop blaming the Liberalised Remittance Scheme for pressure on the rupee, he leaned on the latest LRS data from the Reserve Bank of India. Total outward remittances under LRS fell to USD 28.98 billion in 2025-26, and Shenoy wrote that "LRS outflows are falling, not rising", as Business Today reported on 7 November. The total is falling, but the money clients send abroad to invest is rising, and that is the part of the data an advisor's clients sit in.
The difference shapes the advice clients need this winter. The debate over whether the RBI should curb remittances is being argued on headline totals, while any scrutiny of investment remittances lands on the documents, tax collection and reporting that advisors already handle. Investment remittances attract TCS of 20 per cent above ₹10 lakh, as our guide to TCS on foreign remittance explains, so a client who invests more abroad also has more tax collected at source to track and claim. Reading the data by purpose, not by total, is the better way to prepare clients for the questions ahead.
What the LRS data shows by purpose
The RBI publishes outward remittances under LRS each month in Table 36 of its Bulletin, split into ten purposes. For 2025-26, travel was by far the largest at USD 16.44 billion, more than half of the total. Maintenance of close relatives came to USD 3.54 billion, gifts to USD 2.59 billion and studies abroad to USD 2.31 billion. Investment in equity and debt was USD 2.65 billion, and the purchase of immovable property abroad was USD 529 million.
The direction tells advisors more than the size. Business Standard, reporting the RBI's annual figures on 22 May 2026, said investment in equity and debt rose 56.1 per cent in 2025-26 and property purchases rose 63.8 per cent, while the total fell about 2 per cent. The current year has followed the same pattern. In August 2026, clients sent USD 321.5 million abroad for equity and debt, against USD 152.2 million in August 2025, according to the RBI table. Total LRS remittances for April to August 2026 were USD 12.56 billion, up 4.5 per cent on a year earlier, Business Today reported.
Why the education figures need a careful reading
Advisors who quote this data to clients should be careful with one line. From March 2026, the RBI began splitting travel into sub-items, including travel for education, which covers fees and hostel expenses. Its note to the table says studies abroad now covers only courses taken remotely, such as correspondence courses. As a result, the fall in studies abroad this year mostly reflects a change in classification, not families spending less on education. In August 2026 alone, travel for education came to USD 855.5 million.
The same care applies to the wider debate. Shenoy's argument is that travel makes up most of LRS and that the scheme is small next to India's foreign exchange reserves. Several outlets, including Outlook Money on 29 October, have reported that the RBI is considering a ₹50 lakh sub-limit for some purposes inside the USD 250,000 annual cap, citing a Zee Business report. The RBI has published no consultation paper or notification on this, and its press releases up to 6 November carry no LRS change. Advisors should treat it as a reported proposal, as our note on LRS new rules on the table sets out.
How TCS on LRS applies to investment remittances
The rules for clients who invest abroad have not changed this year. A resident individual may send up to USD 250,000 per financial year under LRS, according to the RBI's LRS FAQ, and the RBI's Master Direction on LRS lists overseas portfolio investment and the purchase of immovable property abroad among permitted purposes. Under Section 394 of the Income-tax Act, 2025, the bank collects TCS at 20 per cent on LRS remittances above ₹10 lakh for purposes other than education or medical treatment. For those two purposes, the rate is 2 per cent.
For example, a client who remits ₹40 lakh in tax year 2026-27 to invest in US securities would have TCS of 20 per cent collected on the ₹30 lakh above the threshold, which comes to ₹6 lakh. That amount is not a final tax. The bank issues a TCS certificate on Form 133 each quarter, and certificates for the quarter to 30 September fall due on 15 November 2026. The client then claims the amount as a credit in their income tax return. Problems arise when remittances are split across banks, family members or purposes and nobody keeps a single record.
Where US property fits in the data
The purchase of immovable property line covers clients who buy property abroad in their own name. Many clients reach US property another way, by investing in shares of a company that holds the property, so the purpose declared to the bank should describe an investment in shares rather than a property purchase. On Raveum, offshore investors, including Indian clients, invest through a US corporation, known as a blocker, that holds the property interest. They typically receive Form 1042-S, a US form that reports income paid and tax withheld. Each deal is reviewed by Raveum and held in its own legal entity, as our guide to US commercial real estate for advisors explains.
Investing in private US commercial real estate carries real risks that clients should hear plainly. They can lose capital, and their money is usually locked in for years because there is no ready market for the shares. Property values can fall, tenants can leave and distributions may not be paid. Many deals use borrowed money, which magnifies losses, and movements in the rupee against the dollar change what the client receives in rupees. Placing too much in one deal or one market adds concentration risk.
What advisors should do with the LRS data
Start by asking each client who invests abroad for a record of every LRS remittance in the current tax year, across all banks and family members, with the purpose declared for each. Check that the purpose on investment remittances matches what the money was used for, and that the TCS shown on Form 133 matches Form 26AS before the return is filed. Clients who use several routes, such as GIFT City funds, US stocks and private US real estate, should see one view of their total against the USD 250,000 limit, and our guide to GIFT City funds and other global routes compares those routes fairly. Advisors who introduce eligible clients through Raveum's partner page will recognise the pattern, because each investment remittance produces a TCS certificate and, later, a US tax form that both need tracking.
When a client asks about the reported sub-limit, the accurate answer is that nothing has been notified and that the current rules still apply. Planning a remittance around a report, by rushing money out or holding it back, adds risk without a clear benefit. Clean records are the better preparation, because they make any future change, if it comes, simple to apply to each client.
The headline from this month's debate was that LRS outflows are falling. For advisors, the more useful reading of the LRS data is that the money clients send abroad to invest is growing even as the total shrinks. That growth brings more TCS to reclaim, more purposes to check and more foreign assets to report, whatever the RBI decides about limits. Our guide to TCS on foreign remittance covers the collection and credit rules in full, and it is the right place to start when a client's investment remittances begin to add up.
Frequently asked questions
What does the latest LRS data show?
The RBI's data shows total LRS remittances of USD 28.98 billion in 2025-26, slightly lower than the year before. Travel is more than half of the total. Investment in equity and debt and the purchase of property abroad are growing quickly, and August 2026 equity and debt remittances were about twice the August 2025 level.
What is the LRS limit for 2026-27?
The Liberalised Remittance Scheme allows a resident individual to send up to USD 250,000 per financial year for permitted current and capital account purposes, according to the RBI. Reports of a ₹50 lakh sub-limit for some purposes have not been confirmed by any RBI notification, so the existing limit still applies to every client.
How much TCS is collected on LRS remittances for investment?
Under Section 394 of the Income-tax Act, 2025, banks collect TCS at 20 per cent on LRS remittances above ₹10 lakh for purposes other than education or medical treatment. The tax is not final. The client receives a Form 133 certificate and claims the amount as a credit in the income tax return.
Has the RBI reduced the LRS limit?
No. As of early November 2026, the RBI has not published any notification or consultation paper reducing the LRS limit. Media reports describe a possible ₹50 lakh sub-limit for some purposes, but these cite unnamed sources. Advisors should keep planning under the current USD 250,000 limit and watch the RBI website for official changes.
Can a resident Indian buy property abroad under LRS?
Yes. The RBI's Master Direction on LRS lists the purchase of immovable property abroad as a permitted purpose, within the USD 250,000 annual limit. The remittance attracts TCS above ₹10 lakh, and the property must be reported in the client's income tax return. Investing in shares of a property company is a separate investment purpose.
Is investing in US real estate through LRS suitable for every client?
No. Private US real estate is illiquid, so money can be locked in for years, and clients can lose capital if values fall or tenants leave. Currency movements and borrowing add further risk. It suits only eligible clients who can hold for the long term and whose wider portfolio can absorb these risks.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
