What Are the Tax Rules for Transferring Money From India to Australia?

The Reserve Bank's Liberalised Remittance Scheme

RBI's own FAQ on the Liberalised Remittance Scheme (LRS) states that "all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both." The scheme started in 2004 with a USD 25,000 cap and has been raised since; RBI is explicit that it "is not available to corporates, partnership firms, HUF, Trusts etc." — only resident individuals.

The financial-year window matters: India's runs April to March, which doesn't line up with Australia's July-to-June tax year. If a transfer is being planned close to the cap, or split across two of India's financial years, that's the calendar to work from, not the Australian one.

Tax Collected at Source on LRS remittances

Remittances made under the LRS can attract Tax Collected at Source (TCS), deducted by the bank at the time of the outward transfer under India's Income-tax Act. The exact rate and threshold depend on the purpose of the remittance and the current provisions of the Act, which change from time to time — this is worth checking directly against incometax.gov.in or with a chartered accountant handling the remittance, rather than relying on a fixed figure, since the applicable rate isn't something this page independently confirms.

NRE or NRO on the sending side

If the money is being remitted from an NRI's own NRE or NRO account in India rather than a purely resident account, the same repatriability distinction that governs money flowing the other way applies here too: RBI's comparison of the two account types describes NRE balances as "Repatriable" in full, while NRO balances are "Not repatriable except for all current income," with NRI/PIO holders able to remit up to USD 1 million per financial year from an NRO account under FEMA 13(R). Our guide on receiving money in India from Australia — NRE or NRO covers this distinction in full, from the perspective of money arriving in India rather than leaving it.

On the Australian side: is the money you receive taxable?

Receiving money from India isn't automatically taxable in Australia — what matters is why it was sent, not the act of receiving it or how large it is. A genuine gift from family, or your own pre-existing savings being moved to Australia, is generally not taxable income to the person receiving it. What can be taxable is money that's actually foreign income earned while you're an Australian tax resident — rental income from a property you still own in India, business profits, or investment returns — regardless of when the cash is actually transferred across. Our guides on receiving money from overseas and on foreign income for new Australian residents cover both sides of this in more depth.

Keeping records on both ends

Indian banks routinely provide remittance documentation for outward transfers made under the LRS as part of standard compliance — keep it. On the Australian side, the same discipline applies: bank statements showing the source of the funds, evidence of how savings were accumulated, and any gift documentation from the sender make it straightforward to demonstrate the transfer's nature if the ATO ever asks about a large or unusual deposit.

Making the transfer

For the practical side of moving money between the two countries — methods, fees, and what to check before sending a large amount — see our corridor guides on sending money from Australia to India and transferring money to Australia from India. If money is going to be flowing back to India as well as arriving from it, our guide on which Indian account should receive money sent from Australia covers the NRE/NRO question for that direction specifically.

How much can be sent from India to Australia in one financial year?

Under the RBI's Liberalised Remittance Scheme, a resident individual can remit up to USD 250,000 per Indian financial year (April–March) for permitted purposes. The scheme doesn't cover corporates, partnerships, HUFs or trusts.

Will tax be deducted before the money leaves India?

Remittances under the LRS can attract Tax Collected at Source under India's Income-tax Act. The applicable rate depends on the current provisions and the purpose of the remittance — check with the remitting bank or a chartered accountant for the figure that applies right now.

Is money I receive from family in India taxable in Australia?

A genuine gift generally isn't taxable income in Australia, and neither is moving your own pre-existing savings. What can be taxable is foreign income — rent, business profits, investment returns — earned while you're an Australian tax resident, regardless of when it's actually transferred.

Does the LRS limit apply to NRIs sending money from an NRO account?

NRO account balances are remittable up to USD 1 million per financial year under FEMA 13(R), separate from the resident-individual LRS cap. NRE account balances are fully repatriable.

What documents should I keep for a large transfer from India?

Keep the remittance documentation your Indian bank provides, plus evidence on the Australian side of the source of the funds — bank statements, gift letters, or records of how the savings were accumulated — in case a large deposit is ever queried.