Outward remittances under the Liberalised Remittance Scheme (LRS) for resident individuals surged nearly 20% year-on-year to a record $2.5 billion in June 2026, according to Reserve Bank of India (RBI) data. The growth was 6% month-on-month from May and 11% year-on-year, demonstrating strong momentum in overseas investment and travel activities. Investments in equity and debt hit an all-time high of $0.46 billion, with equity and debt investment remittances more than doubling to $456.7 million compared to the previous year. Travel-related remittances under LRS rose 10.7% YoY to $1.37 billion, accounting for 54% of total remittances and growing 6% month-on-month, likely driven by rupee depreciation making overseas travel more attractive. As per The Economic Times, Indians disbursed $1.3 billion on international travel in June, up from $1.2 billion in May, reflecting a significant uptick in travel expenditure.
The surge in overseas investments was primarily driven by deposits and investments in equity and debt, which grew at 75% and 119% YoY respectively in June. Deposits for June came in at $0.07 billion, but saw a sharp sequential correction, falling around 40% month-on-month. Overall outward remittances under LRS stood at $7.2 billion in April-June 2026 compared to $6.9 billion in April-June 2025. According to The Hindu BusinessLine, experts note that a relatively subdued return profile of Indian equities after a prolonged rally is likely to have prompted high-net-worth individuals and family offices to diversify globally. Elon Musk-led SpaceX's $1.75 trillion IPO was also in June and contributed partially to a spike in investment activity. Sitashwa Srivastava, Founder and CEO of cross-border investing platform Borderless, noted increased appetite for dollar-linked fixed income investments given rupee depreciation, with investors looking to build portfolios around dollar-denominated debt rather than rupee debt.
Within travel, education-related remittances rose 15% month-on-month to $96 million in June, up from $92 million in May, in line with the beginning of the overseas education season. Business travel was flat and other travel (holidays and other spends) grew only 3% month-on-month at $0.85 billion. Remittances for the purchase of immovable property also rose 31.5% YoY to $49.66 million, demonstrating strong demand across multiple investment categories. Remittances for maintenance of close relatives accounted for $287 million, reflecting continued support for family members abroad. Deposit-related remittances increased 67.95% YoY to $70.74 million, though they experienced the sequential correction mentioned above.
Resident individuals can use LRS for education, medical treatment, business or personal travel, maintenance of relatives abroad, and gifts or donations. As reported by Business Standard, banks may permit remittances above the US$250,000 limit for education and medical treatment based on supporting estimates. The scheme also covers overseas investments including overseas direct investments (ODI), overseas portfolio investments (OPI), opening foreign currency accounts and buying property abroad. Before making an overseas remittance, individuals must submit Form A2/application-cum-declaration to the authorised dealer bank, providing details such as Permanent Account Number (PAN), amount, purpose, source of funds, beneficiary and remittances already made during the financial year.
Under Section 394(1) of the Income-tax Act, 2025, TCS applies when aggregate LRS remittances exceed ₹10 lakh in a tax year. According to Business Standard, from April 1, 2026, the rate is 2 per cent on the amount exceeding ₹10 lakh for education or medical treatment, while 20 per cent applies to the amount exceeding ₹10 lakh for other purposes. For overseas tour programme packages, TCS is 2 per cent on the entire amount without the ₹10 lakh threshold. Capital gains tax rates depend on holding period, with holdings under 2 years taxed as per income tax slab rates, and a 12.5% tax rate applicable for holdings held for more than 2 years. The tax collector deposits the TCS collected with the government, and the amount is available as a tax credit to the resident individual who made the remittance.
