When you want to send money abroad under LRS, the transfer typically happens through your bank. Most banks today allow this through internet banking, although it can also be done by submitting forms at the branch.

The key document involved is called Form A2.

Form A2 is a mandatory declaration required by authorised dealer banks in India.

In this form, I confirm a few basic things:

• The amount I am sending
• The purpose of the remittance
• The RBI purpose code linked to that transaction
• That the transfer is within my USD 250,000 annual limit

Once the form is submitted, the bank performs a few checks in the background. It verifies the PAN, checks how much of the annual LRS limit has already been used during the financial year, applies any applicable tax collection at source (TCS) if required, and then processes the transfer.

This declaration step is not optional.

It follows the same idea we discussed earlier with airport customs. When something moves across a border, it has to be declared. In the case of money, banks act as the gatekeepers of the system. They track usage under LRS, collect taxes on behalf of the government when required, and report the remittance to the RBI along with the relevant purpose code.