LRS limit vs NRO repatriation: key rules for NRIs
The Liberalized Remittance Scheme (LRS) $250,000 USD limit applies only to resident Indians. NRIs are governed by the NRO repatriation rules, which allow transferring up to $1 Million USD per financial year from NRO account balances, subject to tax clearances (Form 15CA/15CB).
LRS is for residents; NRIs use the $1M NRO repatriation quota
The $250,000 USD LRS limit is for resident Indians sending money out of India. It does not apply to NRIs. NRIs looking to transfer funds out of India can repatriate up to $1 Million USD per financial year from their NRO accounts, while NRE and FCNR account transfers are 100% repatriable without any limits.
Key points
- LRS is resident-only — The $250,000 LRS limit applies strictly to resident Indians sending money abroad. NRIs are exempt from this limit.
- NRO $1M quota — NRIs can repatriate up to $1 Million USD per financial year from NRO balances, covering rent, interest, or property sale proceeds.
- NRE is unlimited — Funds held in NRE or FCNR(B) accounts can be repatriated abroad at any time with no limits and no tax clearances required.
Why the LRS limit does not apply to NRIs
The Liberalized Remittance Scheme (LRS) is an RBI facility that allows resident individuals to freely remit up to $250,000 USD per financial year for permitted current or capital account transactions abroad (such as education, travel, or foreign investments).
Since NRIs are non-residents under FEMA, they are not eligible for the LRS. A common point of confusion is NRIs asking if they are limited to $250k when transferring funds from India. The answer is no — they are governed by a separate repatriation framework.
If you are a resident Indian who recently became an NRI, your status changes under FEMA, and your resident bank accounts must be redesignated as NRO. From that point, your outgoing remittances follow the NRI repatriation rules rather than LRS.
The $1 Million NRO repatriation framework
Under the Foreign Exchange Management Act (FEMA), NRIs are allowed to repatriate up to $1 Million USD per financial year (April to March) from their NRO accounts.
This limit covers balances arising from legitimate Indian income, including rental income, dividend yields, pension, interest on deposits, and proceeds from the sale of residential or commercial property.
To utilize the $1M repatriation limit, the NRI must submit Form 15CA and Form 15CB to their bank. Form 15CA is a self-declaration, while Form 15CB is a certificate signed by a Chartered Accountant verifying that Indian taxes have been paid on the remitted funds.
Repatriating from NRE and FCNR accounts
In contrast to NRO accounts, funds held in NRE (Non-Resident External) and FCNR(B) (Foreign Currency Non-Resident) accounts are fully and freely repatriable.
There is no limit on the amount of money you can transfer out of these accounts, and no tax clearance paperwork (Form 15CA/15CB) is required by the bank.
This is because NRE and FCNR accounts are funded through inward foreign currency remittances or transfers from other NRE/FCNR accounts — meaning the money originated outside India and has already been verified as tax-compliant foreign capital.
Frequently asked questions
Can an NRI repatriate more than $1 Million per year from NRO?
Yes, but it requires special, prior approval from the Reserve Bank of India (RBI). Approvals are typically granted for exceptional cases such as medical treatment abroad, education expenses, or settlement of inheritance disputes beyond the $1M limit.
Does the $1M limit apply to the sale of inherited property?
Yes. The proceeds from the sale of inherited property must be credited to an NRO account and count towards the $1 Million annual repatriation limit. You must provide the inheritance mutation documents and tax clearances to process the transfer.
What is the timeline for resetting the $1M limit?
The limit is calculated per Indian financial year, which runs from April 1 to March 31 of the following calendar year. The limit resets to $1 Million USD on April 1 every year.