LRS for Medical Treatment Abroad: Limit, TCS and Documents

You can pay for medical treatment abroad under the RBI's Liberalised Remittance Scheme (LRS), using purpose code S0304. Each resident can send up to $250,000 a financial year, and your bank can allow more if a hospital or doctor's estimate supports it. TCS is nil on the first ₹10 lakh a year and 2% above that, which you claim back in your tax return.

The rules cover the patient's treatment and stay, one attendant, and emergencies that arise while you are already abroad.

Table of contents

• What medical expenses can you pay under LRS?
• Can you send more than $250,000 for medical treatment?
• What documents does your bank need?
• What cannot be paid under the medical purpose code?
• How much TCS applies to medical remittances?

What medical expenses can you pay under LRS?

When it comes to healthcare, the Reserve Bank of India classifies overseas medical remittances under purpose code S0304 (travel for medical treatment). This ensures that legitimate medical costs are fully covered under the Liberalised Remittance Scheme, provided you document them correctly with your bank.

What is allowed

Treatment Costs	Payments to overseas hospitals, clinics, or doctors for consultations, surgeries, therapy, or diagnostics. Advance deposits requested by hospitals before admission. Bills for laboratory tests, scans, and post-operative treatment.
Patient Maintenance	Living expenses such as food, accommodation, and daily costs incurred while the patient is undergoing treatment abroad. Can be remitted as a lump sum based on the hospital’s estimate or patient’s expected duration of stay.
Attendant Costs	One attendant is permitted to accompany the patient. Their airfare, lodging, meals, and incidental expenses can be remitted under the same medical code (S0304). Requires the patient’s admission letter or doctor’s note specifying the need for an attendant.
Emergency Medical Treatment Abroad	If an individual falls ill or meets with an accident after reaching a foreign country, banks can still release foreign exchange for immediate medical expenses. Proof such as hospital admission or medical certificate is needed.

Reference table

Expense Type	Allowed?	RBI Purpose Code	Notes / Documentation Required
Hospital treatment, surgery, diagnostics	✅ Yes	S0304	Hospital invoice or doctor’s estimate
Patient living expenses abroad	✅ Yes	S0304	Estimate of stay, admission letter
Attendant’s airfare & living	✅ Yes	S0304	Proof of patient admission; attendant passport/visa
Emergency treatment if illness arises abroad	✅ Yes	S0304	Emergency admission papers or doctor’s certificate
Post-op rehab or physiotherapy	✅ Yes	S0304	Proof of ongoing treatment plan
Cosmetic or elective procedures (non-essential)	⚠️ Gray	S0304 (only if backed by medical necessity docs)	Subject to bank’s scrutiny
Routine tourist costs (shopping, leisure)	❌ No	N/A	Not permitted under medical head

Can you send more than $250,000 for medical treatment?

Yes, in two ways, and neither needs separate RBI approval:

• One remitter above the limit: your bank can release more than $250,000 for treatment abroad if a hospital estimate or invoice supports it (RBI Master Direction on LRS, para A.7), and report it under S0304.
• Family members pooling: each family member has their own $250,000 limit and can remit for the same patient, using the same hospital documents.

Example. Suppose surgery in the US is estimated at $400,000. The father remits $250,000 with the hospital invoice, and the mother remits the remaining $150,000 from her own limit with the same documents. Both are reported under S0304, so TCS is 2% on each parent's remittances above ₹10 lakh, not 20%.

What documents does your bank need?

When remitting funds abroad for medical treatment, banks need to verify the legitimacy of the expense. Typically, your Authorised Dealer (AD) bank will ask for the following:

Identity and compliance documents

• Valid passport and visa of the patient (and attendant, if applicable).
• PAN card (for tracking against LRS limit).
• Form A2 and the LRS declaration confirming the purpose of remittance.

Medical proof

• A hospital estimate or invoice indicating treatment cost.
• Doctor’s certificate or admission letter from the overseas medical institution.
• For emergencies, proof of admission or urgent care note.

Special cases

• If remitting to the patient’s overseas account (instead of directly to the hospital), banks may ask for additional supporting documents to establish that the funds are strictly for medical use.
• For attendant remittances, documents showing the patient’s admission and relationship to the attendant.

Note: Requirements may vary slightly across banks, but keeping these documents ready ensures your transfer is processed quickly without queries or rejections.

What cannot be paid under the medical purpose code?

Not every remittance linked to a trip abroad can be classified under the medical treatment code (S0304). Misusing the category may lead to higher TCS, rejection by your bank, or even FEMA scrutiny.

What is not allowed under “medical”

• Gifting money to relatives abroad: RBI does not permit using the medical head to send funds to another Indian resident’s overseas account. Each individual must use their own LRS quota.
• Non-medical travel or leisure costs: Sightseeing, shopping, or holiday expenses must be coded under personal travel (S0306), not under medical.
• Incorrect purpose coding: If a remittance is made to an individual account without proper hospital documents, banks may classify it as family maintenance instead of medical. This attracts a higher TCS rate of 20% rather than the concessional 2%.

General prohibited uses under LRS

• Speculative forex, margin trading, or derivative bets.
• Lottery, betting, or gambling.
• Transfers to FATF blacklisted or non-cooperative countries.

Note: Always align your documents, purpose code, and beneficiary details with the actual medical need. Any mismatch can push your transfer into a higher-tax or prohibited category.

How much TCS applies to medical remittances?

TCS on medical treatment abroad is nil on the first ₹10 lakh you remit under LRS in a financial year and 2% above that, under section 394 of the Income-tax Act 2025. The ₹10 lakh threshold is per PAN and counts all your LRS remittances in the year, whatever their purpose. The attendant's travel and living costs sent under S0304 get the same 2% rate.

Example. Suppose you send ₹15 lakh to a hospital abroad this year, and it is your only LRS remittance.

Item	Amount
Total remitted for treatment	₹15,00,000
Threshold with no TCS	₹10,00,000
Amount above the threshold	₹5,00,000
TCS at 2%	₹10,000

The result: your bank collects ₹10,000 as TCS, against ₹1 lakh if the same payment were coded as a gift or maintenance

TCS is credited to your PAN and set off against your income tax when you file your return, and any excess is refunded. You can also adjust it against your advance tax or salary TDS during the year.

About Paasa

Paasa is a global investing platform for Indian residents and NRIs. It gives you direct access to stocks on their home exchanges in the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore, along with ETFs and UCITS funds.

Paasa does not process hospital payments, but its team regularly helps investors and families work out the right purpose code and documents for LRS remittances.

• LRS and FEMA handled for investing: the remittance paperwork for your investment account is prepared for you, and every INR transfer is tracked for your return.
• TCS in one place: see the TCS collected on your investment remittances alongside your capital gains and dividends, ready for your return.
• Money already abroad: if you hold a global investing account, you can sell holdings and move the proceeds to your own bank account abroad when you need funds there.