Now, one part of the LRS framework that often confuses people is the USD 250,000 limit.

Many assume it is a lifetime cap. It is not.

It is simply the maximum amount a resident individual can remit abroad in a financial year under the LRS framework.

There are three aspects of this limit that are worth understanding clearly.

Aspect #1: The limit resets every financial year.

India’s financial year runs from April 1 to March 31. At the beginning of every new financial year, the limit resets to USD 250,000 again.

There is no carry forward.

So if I used only USD 80,000 last year, the remaining amount does not accumulate. The next year simply begins with a fresh USD 250,000 limit.

Aspect #2: The limit applies per individual, not per household.

If both spouses are resident Indians with PANs, each person has their own USD 250,000 limit. That means a couple could legally send USD 500,000 abroad in a single financial year if needed.

Even minors technically have their own limits, although the remittance has to be executed by a parent or guardian on their behalf.

Aspect #3: The limit works like one combined pool across all purposes.

There is no separate bucket for investments and another for travel or education. Everything draws from the same USD 250,000 pool.

So over the course of a year, different needs can gradually use up that limit.

For example, imagine a year where:

• USD 50,000 is used to invest in US equities under LRS code S0001
• USD 30,000 is sent for a child’s tuition abroad under LRS code S1301
• USD 70,000 is spent on overseas travel under LRS code S0301

At that point, the total usage becomes USD 150,000, leaving USD 100,000 available for the rest of the financial year.

Once the total reaches USD 250,000, your remittance capacity under LRS for that year is fully used. The limit resets only when the next financial year begins.