RBI and FEMA

Wise, Revolut or a Bank: Where RBI's LRS and TCS Rules Apply to Cross-Border Payments

Author:: Editorial team, serviceexportguide.com
Verified by:: Editorial team
Published: 31 October 2026
Last modified: 31 October 2026
Fees checked on: 28 October 2026
Reading time: 7 min read

Short answer

RBI's Liberalised Remittance Scheme lets resident individuals send up to USD 2,50,000 abroad each financial year.¹ From 1 April 2026, TCS under section 394 of the Income-tax Act, 2025 is 20% above ₹10 lakh for most LRS purposes.²⁹ Wise sends LRS remittances through an AD-II partner.¹³ Revolut India's wallet holds rupees only.¹⁴ Export receipts fall under the FEMA 2026 Regulations.²

Applies to	Rules involved	Platforms compared	Last verified
Resident individuals sending money abroad (LRS); exporters receiving money (FEMA 2026)¹²	LRS Master Direction, Income-tax Act, 2025 section 394, FEMA 2026 Regulations¹²²⁹	Skydo, Razorpay, Karbon Business, Indian AD bank, Revolut, Wise¹³¹⁴¹⁵¹⁶¹⁷	31 October 2026³

Searches for the cheapest way to move money across borders mix two different flows. Sending money out of India as an individual falls under RBI's Liberalised Remittance Scheme (LRS), and banks collect tax at source (TCS) on large remittances.¹²⁹ Receiving payment for services you export falls under the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations).² The heading of this page therefore asks where LRS and TCS apply, because for an Indian service exporter receiving money, neither rule describes the payment. For the receiving side in full, read how to receive international payments in India.

How do Wise, Revolut and a bank compare for cross-border payments?

Wise, Revolut and an Indian bank differ in which direction of payment each handles for Indian users: Wise and banks handle money coming in and going out, while Revolut India publishes no route for a foreign payer.¹²³¹³¹⁸ For receiving export proceeds, the table adds the three lowest-cost providers for a USD 5,000 receipt on published fees, ordered by estimated cost, then the rest A to Z.¹⁵¹⁶¹⁷

Platform	Best for	Fee	FX markup	Settlement	FIRA	RBI PA-CB status	Source
Skydo	Local bank transfers from major markets	USD 19 plus GST up to USD 2,000; USD 29 plus GST from USD 2,001 to 10,000; 0.3% plus GST above	0% markup on the mid-market rate (product page); retail rate set by Skydo or its partner banks (terms)	Within 24 hours (product page); T+1 to T+3 business days (terms)	Free FIRA on every payment	Authorised PA-CB I & O (8 January 2026)	³¹⁵²⁰²¹³⁰
Razorpay	Local transfers from the US, UK and eurozone	1% plus GST per bank transfer; flat ₹1,000 on transactions below ₹1,00,000	Razorpay says 0% markup on bank transfers	T+1 for bank transfers	Foreign Inward Remittance Statement (FIRS) within 24 hours of settlement	Authorised PA-CB I & O (19 December 2023)	³¹⁶²²
Karbon Business	US bank transfers and marketplace payouts	1% transaction fee, listed on its PayPal comparison page	0% (freelancer page); 0.5% to 1.0% (PayPal alternative page)	24 to 48 hours	FIRA for every transaction from a banking partner	Not on the RBI list itself; its terms run export receipts under a partner the RBI lists as a PA-CB	³¹⁷²³²⁴
Indian AD bank (SWIFT wire)	Clients who pay by international wire	Set in the bank's published policy, which must list its charges	The bank's own rate	Depends on the banks involved	FIRA or e-FIRC from the bank; its IRM supports the e-BRC	Not applicable: the bank is an authorised dealer	²⁵
Revolut	Personal spending, not export receipts	No fee to receive by UPI into the INR wallet	Not applicable: the India wallet holds INR only	UPI transfers usually instant	Not published	Listed as a prepaid payment instrument issuer, not a PA-CB	³¹⁴¹⁸
Wise	Bank transfers to local account details	Domestic (non-Swift) receipts free (business fee table); 2 USD equivalent per transfer to the INR account (help article); USD 6.11 per USD wire or Swift payment; 18% GST on Wise fees	Mid-market rate plus a fee that depends on the currency; no INR percentage published	INR reaches the bank within 1 to 2 days of Wise receiving the payment	e-FIRC for each transfer within 3 working days	Authorised PA-CB-I (12 March 2026)	³²⁵²⁶²⁷

Wise outward: Wise India says LRS remittances are facilitated by Vaho Forex Private Limited, an Authorised Dealer Category-II, with payment services in partnership with JPMorgan Chase Bank, Mumbai branch.¹³
Revolut India: The India wallet holds INR only and receives money by UPI only.¹⁴¹⁸
Revolut Business: Requires a company registered in the UK, the EEA or the US.²⁸

Compare the two apps directly in Wise vs Revolut.

Which RBI rule governs cross-border payments into and out of India?

Outward remittances by resident individuals are governed by the LRS Master Direction, and inward payments for exported services by the 2026 Regulations.¹² TCS is an income-tax rule that rides on the outward flow.²⁹

Rule	Best for (who it applies to)	Plain meaning	Source
LRS, paragraph 1	Resident individuals sending money abroad	Up to USD 2,50,000 per financial year; not for companies, firms, HUFs or trusts	¹
LRS, paragraph 5	Individuals trading abroad	Margins or margin calls to overseas exchanges are not allowed	¹
Income-tax Act, 2025, section 394(1), Table Sr. No. 7	Individuals remitting over ₹10 lakh a year	AD bank collects TCS above the threshold	²⁹
FEMA 2026 Regulations	Freelancers and companies exporting services	EDF, nine-month realisation, bank reporting	²⁶
PA Master Direction, paragraph 11(d)	Exporters paid through a PA-CB	₹25 lakh per transaction, inward or outward	⁷
Money Transfer Service Scheme	Individuals receiving personal remittances	Inward personal remittances only; trade related remittances excluded	⁸

What TCS rates apply to LRS remittances from 1 April 2026?

TCS on LRS remittances from 1 April 2026 is nil up to ₹10 lakh a year for each purpose, with these rates above it, as reproduced by Kotak Mahindra Bank.²⁹

LRS purpose	Best for	TCS from 1 April 2026	Source
Education funded by a loan from a specified institution	Students with education loans	Nil	²⁹
Education from other sources	Families paying fees directly	2% above ₹10 lakh (previously 5%)	²⁹
Medical treatment abroad	Patients and families	2% above ₹10 lakh (previously 5%)	²⁹
Any other purpose	Investment, gifts, travel spending	20% above ₹10 lakh	²⁹
Overseas tour package	Holiday buyers	2% with no threshold	²⁹

What does each option charge to receive money from abroad?

Each option charges an exporter differently to receive money from abroad, and Revolut India publishes no route for a foreign payer at all.¹⁵¹⁶¹⁷¹⁸²⁶

Option	Best for	Receiving fee	Conversion to INR	Source
Skydo	Local bank transfers from major markets	USD 19 or 29 plus GST by band	0% markup on the mid-market rate (product page); retail rate set by Skydo or its partner banks (terms)	¹⁵²⁰²¹³⁰
Razorpay	Local transfers from the US, UK and eurozone	1% plus GST	0% markup on bank transfers, per Razorpay	¹⁶²²
Karbon Business	US bank transfers and marketplace payouts	1% transaction fee	0% (freelancer page); 0.5% to 1.0% (PayPal alternative page)	¹⁷²³
Indian AD bank	Clients who pay by international wire	Per the bank's published schedule	Bank's rate	²
Revolut	Personal spending, not export receipts	No foreign receiving route published	Not applicable	¹⁴¹⁸
Wise	Bank transfers to local account details	Free domestic (business fee table); 2 USD equivalent per transfer to the INR account (help article); USD 6.11 by wire or Swift	Currency-dependent fee	²⁵²⁶²⁷

Which option is cheapest at $500, $2,000 and $5,000?

On published fees, the cheapest way to receive USD depends on invoice size, because flat fees fall as a share of larger payments.¹⁵¹⁶ The table below works out the INR you receive at today's rate.

Platform	Best for	INR on USD 2,000	INR on USD 5,000	INR on USD 10,000	Cost on USD 5,000
SkydoMost INRTransfer to Skydo local account details or international SWIFT account	Local bank transfers from major markets	₹1,86,373	₹4,67,991	₹9,39,206	0.68%
Karbon BusinessBank transfer to a Karbon virtual USD account	US bank transfers and marketplace payouts	₹1,86,262 to ₹1,86,601	₹4,65,655 to ₹4,66,503	₹9,31,311 to ₹9,33,007	1.00 to 1.18%
RazorpayMoneySaver Export Account: bank transfer to virtual account details (Standard plan)	Local transfers from the US, UK and eurozone	₹1,86,262 to ₹1,86,601	₹4,65,655 to ₹4,66,503	₹9,31,311 to ₹9,33,007	1.00 to 1.18%

Not estimated because pricing for USD is not fully published: Wise.

Ranked by INR received on USD 5,000. Reference rate: European Central Bank data for 13 November 2026. Fees, conversion markup, GST on fees and FIRA charges as published by each provider, checked 28 October 2026. Ranges appear where a provider publishes a range or does not state its GST rate. Intermediary bank charges are excluded. See the methodology.

For example, Skydo's USD 19 plus GST is about 4.5% of a $500 invoice and 1.12% of a $2,000 invoice, and Razorpay's 1% plus GST is 1.18% on payments of ₹1,00,000 and above.¹⁵¹⁶ No TCS is collected on these receipts, because TCS under section 394 applies to remittances sent under LRS.²⁹

What documents and GST apply?

An exporter receiving money needs proof of receipt, an EDF and, if GST registered, an LUT, while an individual sending money under LRS deals with the bank's TCS.²⁹²⁹

Document	Best for	What it does	Source
FIRA or e-FIRC	Exporters receiving money	Proof the foreign payment arrived; Wise issues an e-FIRC per transfer	²⁵
e-BRC	Exporters claiming GST benefits	Self-certified on DGFT from bank IRM data	⁵
EDF	Every service exporter	Declares each export to the AD bank	²
LUT	GST-registered exporters	Zero-rated export invoices without IGST	⁹¹⁰
TCS collected by the AD bank	Individuals remitting above ₹10 lakh	Tax collected on LRS remittances	²⁹

Zero-rating: An export of services meeting IGST section 2(6) is a zero-rated supply.¹⁰¹¹
Personal remittances: Money transfer services under MTSS cannot carry trade related remittances.⁸

What changes in 2026 for cross-border payments?

Cross-border payments in 2026 are affected by the Income-tax Act, 2025, revised TCS rates, the 2026 Regulations and new RBI authorisations.²³¹²²⁹

Income-tax Act, 2025: In force from 1 April 2026, with TCS on LRS moved to section 394.¹²²⁹
TCS rates: Education and medical rates fell to 2% above ₹10 lakh, and overseas tour packages to 2% with no threshold, from 1 April 2026.²⁹
2026 Regulations: Govern export receipts from 1 October 2026, with an EDF for every service exporter.²
Realisation: Nine months from the invoice date.⁶
Wise: Wise Payments India was authorised as a PA-CB for inward payments on 12 March 2026.³

TCS is a tax matter, so confirm how it affects your own return with a chartered accountant.

How did we verify this?

We checked this page against the sources below on 31 October 2026. Provider fees, conversion markups and RBI payment aggregator (PA-CB) status were checked on 28 October 2026. Rupee amounts use European Central Bank reference rates for 13 November 2026. Read our methodology or report an error.

Frequently asked questions

Does TCS apply when I receive money from abroad as a freelancer?+

TCS under section 394 of the Income-tax Act, 2025 is collected by authorised dealers on remittances sent abroad under the Liberalised Remittance Scheme.²⁹ Payment for services exported from India is an inward receipt governed by the FEMA 2026 Regulations, so the LRS limit does not describe it.¹²

What is the LRS limit for 2026-27?+

Authorised dealers may freely allow remittances by resident individuals up to USD 2,50,000 per financial year, April to March, for permitted current or capital account transactions.¹ The scheme is not available to corporates, partnership firms, HUFs or trusts.¹ RBI's FAQ adds that once the limit is used, no further remittance is allowed even if investment proceeds are brought back.⁴

What is the TCS rate on foreign remittance from 1 April 2026?+

From 1 April 2026, TCS on LRS remittances is nil up to ₹10 lakh a financial year and 20% above it for most purposes; 2% above ₹10 lakh for education from own funds and for medical treatment; nil for education loans from specified institutions.²⁹ Overseas tour packages attract 2% with no threshold.²⁹

Can I use Revolut to receive payments from foreign clients in India?+

Revolut India says its INR account receives money by UPI only, and its terms say the wallet holds Indian rupees and cannot be used for business purposes.¹⁴¹⁸ RBI lists Revolut Payments India as a prepaid payment instrument issuer, not a cross-border payment aggregator.³

Is Wise covered by LRS when sending money from India?+

Wise India says online outward remittances under the Liberalised Remittance Scheme are facilitated by Vaho Forex, an Authorised Dealer Category-II, which is responsible for LRS compliance.¹³ Money that Wise collects for Indian businesses from abroad is handled by Wise Payments India, an authorised PA-CB for inward payments.³

Can a company use LRS to pay for foreign software subscriptions?+

The Liberalised Remittance Scheme is for resident individuals and is not available to corporates, partnership firms, HUFs or trusts.¹ RBI's LRS FAQ says entities other than individuals have separate facilities.⁴ Ask your AD bank which route applies to your company's payment.

How can freelancers save money on cross-border payments into India?+

Freelancers usually save most by giving clients local account details instead of card or wallet routes, and by comparing the conversion markup as well as the fee. On published fees for a USD 5,000 receipt, Skydo costs about 0.68% and PayPal 7.27% to 8.23%.¹⁵¹⁹

This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.

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