If you’re an Indian planning an overseas trip, one question always comes up: can you use your LRS limit to cover flights, hotels, or forex expenses? The answer is ‘Yes’ but with a few important rules you need to know.
Most travelers run into the same doubts:
Table of Contents
- What is LRS
- Legal travel expenses
- Special cases (Medical travel and Educational travel)
- Purpose code
- Illegal travel expenses
- Legal expenses, but not classified as ‘Travel’
- Credit Card Spends
- TCS on Travel
- How to claim back TCS
- Conclusion
- FAQs
What is LRS?
The Liberalised Remittance Scheme (LRS) is the framework through which resident Indians can legally send money abroad.
- Under the scheme, every individual is allowed to remit up to USD 250,000 per financial year (April–March) for permitted purposes such as travel, education, medical treatment, or investments.
- All remittances under LRS are reported by banks to the Reserve Bank of India (RBI) and tracked against your PAN.
- If your total outward remittances cross ₹10 lakh in a financial year, certain payments also attract Tax Collected at Source (TCS).
Legal Expenses under LRS
Below are the detailed expenses which are legal as per the RBI guidelines:
Flights and Air Tickets | Payments to international or domestic airlines for overseas journeys. |
Hotels and Accommodation | Prepaid or direct settlement of hotel bills, Airbnbs, serviced apartments abroad. |
Tour Packages | Whether booked through an Indian travel operator or directly with a foreign operator, both qualify.
(The TCS treatment differs - covered in the next section.) |
Daily Living Expenses | Food, shopping, entertainment, internal travel, and other personal expenses while abroad. |
Internal Transport Abroad | Domestic flights abroad, train tickets, taxis, car rentals, ride-hailing apps, ferries. |
Pilgrimage Travel | Expenses for Hajj, Umrah, or other recognised pilgrimages |
Conferences, Seminars & Training | Registration fees and related travel expenses for attending conferences, trade fairs, or specialised training abroad. |
Medical Travel | Overseas treatment, hospital bills, and attendant expenses. |
Medical Attendant Travel | Airfare, stay, and living expenses for one attendant accompanying a patient. |
Education Travel & Student Living | One-time travel for joining a course abroad, plus hostel charges and living expenses for students. Tuition fees are separately remitted under education code. |
Cruises and Charters | Cruise bookings, on-board packages, yacht or charter rentals from foreign operators. |
Forex Card Loads and ATM Withdrawals | Loading a prepaid forex card before travel, or withdrawing cash from ATMs abroad using forex cards (within permitted cash limits). |
Travel Insurance | International health or travel cover purchased as part of the trip. |
Visa and Consular Fees | Payments to embassies, consulates, VACs, or online visa portals (e.g., ESTA, ETA). |
Here are the purpose codes you’ll need when filling the bank’s remittance form:
Purpose | RBI Purpose Code | When to Use |
Personal Travel (Holiday / Visit Relatives) | S0301 | Flights, hotels, tour packages, leisure travel, visiting family or friends abroad. |
Business Travel | S0302 | Attending business meetings, trade fairs, conferences, or work-related travel. |
Pilgrimage Travel | S0303 | Religious journeys such as Hajj, Umrah, or other recognised pilgrimages. |
Medical Travel | S0304 | Hospital treatment abroad, doctor’s fees, surgery or therapy expenses. |
Attendant with Patient | S0306 | Ticket, hotel, and living costs of one attendant accompanying a patient. |
Education Travel | S0305 | Tuition payments, hostel charges, one-time ticket, and ongoing living expenses for students abroad. |
Please Note: Travel to Nepal and Bhutan does not require foreign exchange under LRS. If you attempt to remit funds under the “travel” head, banks may flag or reject the transaction. Expenses for these destinations should be settled in INR or through local payment arrangements.
Illegal Expenses under LRS
Some remittances cannot be routed under the “travel” head, even if they occur while abroad:
Lotteries, Gambling & Betting | Remitting money to a casino account during your holiday. |
Speculative Forex & Margin Trading | Outward remittances cannot be used for forex trading, margin calls, or derivative bets. |
Crypto / Virtual Digital Assets | Outward remittances cannot be used for crypto or virtual digital assets |
FCCB Purchases | Buying Foreign Currency Convertible Bonds of Indian companies abroad is prohibited |
Transfers to FATF Blacklisted Countries | Remittances to “non-cooperative” jurisdictions are barred. |
Sending Money to Another Indian’s Overseas Account | RBI does not allow you to use your LRS limit to fund another Indian resident’s foreign account. Each person must use their own LRS limit directly. |
Common Questions
Can I pay for my spouse’s or children’s travel with my LRS limit?
Yes. You can remit for yourself, your spouse, and dependent family members. Each person also has their own independent USD 250,000 limit.
Can I pay for my child’s international school trip under my LRS limit?
Yes. If the child is a resident Indian, you can remit under your own LRS limit. If it’s linked to education (fees + travel), use the Education purpose code (S0305).
If my dependent parent is travelling for medical reasons, can I remit for both their treatment and my own attendant costs?
Yes. Treatment is covered under Medical Travel (S0304) and your attendant expenses under S0306. Both are legal.
What if I book tickets and hotels for my entire family on my card, will it all count under my PAN?
Yes. If the payment is made from your account or card, the full spend counts under your LRS quota and TCS threshold, even if it’s for family.
If I’m attending a conference abroad, is it business travel or personal travel?
It depends. If sponsored by your company, it may fall under business remittance by the company. If you pay personally, you can classify it under Travel (S0302 – business).
If I cancel a tour package after paying and TCS was deducted, can I get the TCS back?
Yes. The operator cannot refund TCS to you directly, but it will appear in your Form 26AS and you can claim it back while filing ITR.
Legal, but not classified as Travel
Some expenses are fully permitted under LRS, but they require different purpose codes not the “Travel” head.
Category | Why It’s Not Travel | Correct Way / Purpose Code |
Property or Real Estate Abroad | Buying or investing in property overseas is allowed, but it’s an investment, not a travel expense. | Use S0006 – Investment in immovable property with supporting documents. |
Opening / Funding an Overseas Brokerage Account | Permitted under LRS, but must be classified as investment. | Use S0001 – Investment in equity & debt securities or relevant investment code. |
Time Deposits / Bank Accounts Abroad | Passive deposits are under capital account, not travel | Use S0007 – Investment in deposits |
Payments to Foreign Freelancers / Consultants | Professional or commercial services must be coded separately. | Use S0501 – Business and management consultancy services |
Donations to Foreign Charities / Trusts | Donations abroad are permitted but not under travel. | Use S0701 – Donations. |
International Credit Card Spends and LRS
As of FY 2025–26:
- All international credit and debit card spends abroad are counted under LRS.
- Each PAN has a ₹10 lakh annual exemption per financial year (April–March).
- Beyond ₹10 lakh, TCS is deducted at the applicable rate.
Spend Type | Threshold | TCS Rate |
Card spends abroad (flights, hotels, shopping, tourism) | Nil up to ₹10 lakh | 20% on the amount above ₹10 lakh |
Education spends via card (with supporting documents) | Nil up to ₹10 lakh | 5% above threshold (0.5% if via education loan) |
Medical spends via card (with hospital documents) | Nil up to ₹10 lakh | 5% above threshold (0.5% if via medical loan) |
Paasa Advantage: If you already use Paasa for global investing, you also have the flexibility to transfer funds from your brokerage account to your US bank account (if you maintain one). This means that in addition to cards and forex, you have a fully compliant channel to access your own money abroad when needed.
Family and Add-on Cards
- Add-on cards are clubbed with the primary cardholder’s PAN. All spends aggregate into that one ₹10 lakh limit.
- Separate primary cards with different PANs → each person has their own ₹10 lakh exemption.
- For family trips, splitting spends across PANs helps optimize TCS exposure.
Common Questions
Do debit cards and prepaid forex cards follow the same rules as credit cards?
Yes. Debit card and forex card spends abroad also fall under LRS tracking, with the same ₹10 lakh threshold and TCS rules.
Is the ₹10 lakh exemption for credit cards separate from the ₹10 lakh exemption for bank remittances?
No. The exemption is common — all LRS usage (remittances, forex cards, credit cards) adds up under one ₹10 lakh annual threshold per PAN.
TCS on Travel (How It Really Works)
TCS applies only when your total outward remittances under LRS cross ₹10 lakh per PAN, per financial year (April–March).
- Up to ₹10 lakh: no TCS.
- Above ₹10 lakh: TCS applies on the excess amount at the prescribed rate.
Type of Travel Payment | TCS Rate | How It Works |
International Credit Card Swipes Abroad | 20% | Charged on the amount above ₹10 lakh remitted during the financial year, with concessions for medical and education spends. |
Direct LRS Remittances for Travel (flights, hotels, forex cards, payments abroad) | 20% | Charged on the amount above ₹10 lakh remitted during the financial year. |
Overseas Tour Packages Purchased in India | 5% up to ₹10 lakh, then 20% beyond | Even if the package cost is below ₹10 lakh, TCS applies at 5%. Beyond that, 20% applies on the excess. |
Medical Travel | 5% above ₹10 lakh (0.5% if funded via an education/medical loan) | Concessional rate available if supported by medical documentation. |
Education Travel | 5% above ₹10 lakh (0.5% if funded via an education loan) | Tuition, tickets, and living costs covered. Concessional rate applies. |
Expert Note: TCS can look complicated, especially when family members, multiple PANs, or medical/education spends are involved. At Paasa, our team helps investors structure their LRS usage smartly whether for travel or global investments across the US, UK, Europe, China and more.
How to Claim Back TCS on Travel
TCS collected on your overseas travel spend is not an additional cost, it is an advance tax. You can adjust it against your final income-tax liability or claim it as a refund.
Where TCS Appears
- Every bank, forex dealer, or tour operator that collects TCS deposits it against your PAN.
- These entries automatically show up in your Form 26AS and Annual Information Statement (AIS) on the income-tax portal.
How to Claim It in Your Tax Return
- While filing your Income Tax Return (ITR), go to the Taxes Paid section.
- Enter the TCS amounts reflected in 26AS/AIS.
- The system automatically adjusts this against your overall income-tax liability.
- If your liability is lower than the TCS already collected, the excess will be refunded to your bank account.
Common Questions
Do I need to submit my travel invoices or tickets to the Income Tax Department?
No. Banks and operators already report TCS against your PAN. You only need to match it in Form 26AS/AIS while filing. Keep invoices handy in case of future queries.
How do I check if TCS has been credited to my PAN?
Login to the income-tax portal and download Form 26AS or check your AIS. The TCS entries will show under “Taxes Paid.”
What if the TCS doesn’t show up in my 26AS/AIS?
It usually means the bank/operator deposited it under the wrong PAN or hasn’t uploaded it yet. Raise the issue with them immediately before filing your ITR.
What if my family splits the travel cost, who claims the TCS?
TCS is linked to the PAN against which the remittance or booking was made. That person must claim it in their return.
Conclusion
Using your LRS limit for overseas travel is completely legal, but it comes with nuances around purpose codes, TCS, and compliance that many Indian travelers overlook. The line between what is permitted, what is prohibited, and what simply needs the right classification can make a big difference in cost and peace of mind.
For most families, travel is just one part of how their LRS is used. The same annual quota also covers investments, education, and medical expenses abroad. Managing this holistically is what ensures you get the most value without compliance friction.
This is where Paasa helps. It is a compliance-first platform that not only enables global investments but also supports Indian HNIs and family offices in structuring their LRS usage smartly across travel, investments, and other cross-border needs.
About Paasa
Paasa is an Indian investor's gateway to global investing which helps HNIs, family offices, and institutional investors diversify into global markets, from the US and Europe to China, Japan, and beyond.
What sets Paasa apart is the India-facing layer:
- FEMA and LRS compliance built into every transaction
- Tax reporting and analytics tailored for Indian investors (LTCG, STCG, dividend tax, TCS tracking)
- End-to-end support for remittance, reconciliation, and compliance queries
Whether you’re allocating to equities, ETFs, UCITS funds, or managed strategies, Paasa gives you a single, transparent platform to manage your global portfolio with the assurance that your India-specific compliance is always taken care of.
Disclaimer
This blog is for informational purposes only and should not be considered investment, tax, or legal advice. The information provided is based on publicly available regulations and our understanding of the Liberalised Remittance Scheme (LRS) as of the time of writing. Regulations, tax laws, and RBI guidelines are subject to change, and the actual applicability may vary depending on your personal circumstances.
International travel and investments involve risks, including foreign exchange fluctuations, political and regulatory changes, and market volatility. Readers are advised to consult their financial, tax, and legal advisors before making any remittance or investment decisions.
Paasa disclaims any liability for actions taken based on this content.
