Wise, Revolut or a Bank: What RBI's LRS and TCS Rules Mean for Cross-Border Payments
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Short answer
The same rules apply in 2026 to Wise, Revolut and banks in India. RBI's Liberalised Remittance Scheme covers money residents send abroad, up to USD 250,000 a year. TCS under section 394 of the Income-tax Act, 2025 applies to LRS remittances above Rs 10 lakh. Export receipts fall under the FEMA Regulations, 2026, with an EDF and a purpose code.
| Applies to | Rules involved | Platforms compared | Last verified |
|---|---|---|---|
| Resident individuals sending money abroad, and freelancers, agencies and exporters in India receiving foreign payments through Wise, Revolut or an AD bank. | RBI Master Direction on the Liberalised Remittance Scheme, paragraphs A.1, A.15 and A.16; Income-tax Act, 2025, section 394(1) Table Sl. No. 7 and section 394(4); FEMA (Export and Import of Goods and Services) Regulations, 2026, Regulations 3(2), 5(1) and 18(2); IGST Act section 2(6) and section 16; CGST Rule 96A; FETERS purpose codes. | Skydo, Razorpay, Wise Business, Revolut | 6 Oct 2026 |
How do Wise and Revolut compare with a bank for cross-border payments to and from India in 2026?
Platforms named in the question are shown alongside the 2 highest payouts among the platforms this site covers, ranked by the INR received on a $5,000 invoice. Fees were checked on 30 Sept 2026.
| Platform | Best for | Fee | FX markup | Settlement | FIRA | RBI PA-CB status | INR on $5,000 | Source |
|---|---|---|---|---|---|---|---|---|
| Skydo | Indian freelancers and exporters receiving mid to large B2B invoices | $19 up to $2,000, $29 to $10,000, 0.3% above + GST | States zero FX margin at live rate | States under 24 hours; FAQ timelines vary by rail | States instant, free FIRA per payment | RBI authorised PA-CB Inward and Outward; on RBI list | ₹4,69,756 | Skydo pricing (checked 6 Oct 2026) |
| Razorpay | Indian businesses and freelancers on Razorpay invoicing foreign clients | 1% per bank transfer (Rs 1,000 flat below Rs 1,00,000) + GST | States 0% markup on MoneySaver at live rate | States 1 day (T+1 after invoice shared) | FIRS within 24 hours of settlement; no charge listed | RBI authorised PA-CB inward and outward, plus PA-O | ₹4,67,412 | Razorpay pricing (checked 6 Oct 2026) |
| Wise Business | Freelancers and small exporters wanting multi-currency local accounts and eFIRC | Calculator: 1.6% + $2 per payment + 18% GST | Mid-market rate; cost is the 1.6% conversion fee | States under 90 minutes in business hours | eFIRC per transfer, 2 USD + 18% GST | States in-principle PA-CB approval; not found on RBI page | ₹4,64,012 | Wise Business pricing (checked 6 Oct 2026) |
| Revolut | Indian residents using an INR wallet and forex card | Not confirmed; India terms bar business use | Not confirmed for inward payments | Not confirmed | Not confirmed; not mentioned on India pages | States RBI PPI and AD Category-II licences; not PA-CB | Not for business: Revolut India terms bar business use of the account | Revolut pricing (checked 6 Oct 2026) |
- A bank (AD Category-I bank): An Authorised Dealer bank credits export receipts under the FEMA Regulations, 2026 and issues the FIRC or FIRA. For money sent abroad by an individual, the bank takes Form A2 and PAN under paragraphs A.15 and A.16 of the LRS Master Direction, and collects TCS where section 394 applies.
Which RBI and income-tax rules govern cross-border payments through Wise, Revolut or a bank: LRS, TCS or the FEMA export rules?
The direction of the money decides the rule. Money a resident individual sends abroad falls under the Liberalised Remittance Scheme, and the AD bank collects TCS under section 394 of the Income-tax Act, 2025 once LRS remittances exceed Rs 10 lakh. Money a foreign client pays for services exported from India falls under the FEMA Regulations, 2026, with an EDF, a nine-month realisation period and FETERS reporting. For example, a designer paid USD 2,000 by a US client for design services files an EDF for that invoice, because the payment is an export receipt and not a remittance sent abroad under LRS.
| Rule | Source | Clause | Plain meaning | Best for |
|---|---|---|---|---|
| LRS limit | LRS Master Direction | Paragraph A.1 | AD banks may freely allow resident individuals to remit up to USD 250,000 per financial year for permitted current or capital account transactions. The scheme is not available to corporates, partnership firms, HUFs or trusts. | Individuals sending money abroad |
| LRS documents | LRS Master Direction | Paragraphs A.15 and A.16 | The individual designates one AD bank branch, furnishes Form A2 and must provide PAN for every remittance under the scheme. | A first outward transfer |
| Cumulative LRS limit | RBI LRS FAQ | Q 8 and Q 22 | The USD 250,000 limit covers foreign exchange bought or remitted through all sources in India in a financial year. A sole proprietor shares one limit with the owner as an individual. | Freelancers who also pay foreign costs |
| TCS on LRS remittances | Income-tax Act, 2025 | Section 394(1), Table Sl. No. 7 | The authorised dealer collects TCS on LRS remittances exceeding Rs 10 lakh: 2% for education or medical treatment and 20% for other purposes. | Large remittances for investment, travel or gifts |
| TCS exclusions | Income-tax Act, 2025 | Section 394(4) and (5) | No TCS on an education remittance paid from a loan by a financial institution, on an amount on which an overseas tour package seller has already collected TCS, or where the remitter has deducted TDS under another provision. | Students funded by an education loan |
| Realisation of export receipts | FEMA Regulations, 2026 | Regulation 5(1) | The full value of services exported is realised and repatriated within nine months from the invoice date, or twelve months if invoiced or settled in rupees. | Freelancers and exporters receiving payments |
| EDF for services | FEMA Regulations, 2026 | Regulation 3(2) | An exporter of services files an EDF within 30 days from the end of the invoice month. One EDF can cover a month's invoices. | Every service exporter from 1 October 2026 |
| Purpose code reporting | FEMA Regulations, 2026 and FETERS circular | Regulation 18(2) | The AD bank reports every foreign trade transaction under FETERS with a purpose code. | Matching a receipt to the service exported |
| GST on export of services | IGST Act section 16 and CGST Rule 96A | Section 16(1) and (3); Rule 96A(1) | Export of services is zero-rated. With a Letter of Undertaking filed before export, the invoice carries no IGST. | GST-registered exporters |
Which of Wise and Revolut costs least to receive $500, $2,000 or $5,000 in India in 2026?
Each row applies the platform's published fee, FX markup and 18% GST on the fee to the XE mid-market rate for 4 Nov 2026. Platforms without full published pricing are not included.
| Platform and invoice | Fee | FX markup | GST | INR received | Cost | Best for |
|---|---|---|---|---|---|---|
| Skydo, $500 | ₹1,797 | ₹0 | ₹324 | ₹45,178 | 4.48% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $2,000 | ₹1,797 | ₹0 | ₹324 | ₹1,87,076 | 1.12% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $5,000 | ₹2,743 | ₹0 | ₹494 | ₹4,69,756 | 0.68% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Razorpay, $500 | ₹1,000 | ₹0 | ₹180 | ₹46,119 | 2.49% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $2,000 | ₹1,892 | ₹0 | ₹341 | ₹1,86,965 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $5,000 | ₹4,730 | ₹0 | ₹851 | ₹4,67,412 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Wise Business, $500 | ₹928 | ₹0 | ₹167 | ₹46,204 | 2.32% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $2,000 | ₹3,156 | ₹0 | ₹568 | ₹1,85,474 | 1.97% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $5,000 | ₹7,611 | ₹0 | ₹1,370 | ₹4,64,012 | 1.90% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
For example, on a $2,000 invoice Skydo pays about ₹1,87,076 and Wise Business about ₹1,85,474 at today's reference rate, a difference of ₹1,603.
What documents and GST apply to cross-border payments through Wise, Revolut or a bank?
Outward and inward payments need different documents. An individual sending money abroad gives Form A2 and PAN under the LRS Master Direction. A GST-registered exporter files an LUT before export, files an EDF after invoicing and keeps the FIRC or FIRA. CGST Rule 89(2)(c) lists Bank Realisation Certificates or Foreign Inward Remittance Certificates in a GST refund claim for export of services. See what a FIRA is.
| Document | Who issues it | When needed | Best for |
|---|---|---|---|
| Form A2 | The remitter, to the AD bank | With each purchase of foreign exchange under LRS (paragraph A.15) | Individuals sending money abroad |
| PAN | The remitter | Mandatory for every LRS remittance (paragraph A.16) | Every outward LRS transfer |
| LUT in FORM GST RFD-11 | The exporter, on the GST portal | Prior to export, under CGST Rule 96A | Invoicing a foreign client without IGST |
| EDF | The exporter, to the AD bank (or STPI or the SEZ Development Commissioner where they are the specified authority) | Within 30 days from the end of the invoice month (Regulation 3(2)) | All service exports from 1 October 2026 |
| FIRC or FIRA | The AD bank that credits the money in India | After the credit; CGST Rule 89(2)(c) lists the FIRC in a GST refund claim for export of services | Proof of export and GST refunds |
| Purpose code | The AD bank, under FETERS | With each inward remittance (FETERS circular); confirm the code with your AD bank | Classifying a receipt as export of services |
What changed in the LRS, TCS and FEMA export rules in 2026?
Two sets of rules changed in 2026. The Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026, and TCS on LRS now sits in section 394. The FEMA Regulations, 2026 took effect on 1 October 2026 for export receipts. The LRS Master Direction still shows the USD 250,000 limit.
- New Act: The 1961 Act stands repealed on 1 April 2026, according to the Income Tax Department. The tax year replaces the previous year.
- Education TCS: TCS on LRS remittances for education or medical treatment above Rs 10 lakh is 2% from 1 April 2026, in place of 5%, as amended by Act No. 4 of 2026 in section 394(1).
- Export rules: A.P. (DIR Series) Circular No. 20 superseded the Master Direction on Export of Goods and Services from 1 October 2026. See the EDF guide.
- Realisation: An amendment dated 22 September 2026 set the realisation period at nine months, or twelve for rupee invoicing, in place of fifteen and eighteen months.
- LRS limit: The LRS Master Direction, updated as on 6 September 2024, still shows the limit of USD 250,000 per financial year. Check with your AD bank for any later RBI change.
How did we verify this?
Every rule is linked to its official source below with the date it was checked. Platform figures come from each platform's own pages; the full method is on the methodology page.
- RBI Master Direction - Liberalised Remittance Scheme (LRS), FED Master Direction No. 7/2015-16, updated as on 6 September 2024, Paragraphs A.1, A.7, A.15, A.16 (checked 6 Oct 2026)
- RBI FAQs: Liberalised Remittance Scheme, updated as on 6 April 2023, Q 7, Q 8, Q 21, Q 22 (checked 6 Oct 2026)
- Income-tax Act, 2025, as amended by Finance Act 2026 (Income Tax Department PDF), Section 394(1) Table Sl. No. 7 and footnote 88b; section 394(4) and (5) (checked 6 Oct 2026)
- Income Tax Department e-filing: Objective and scope of the new Act, Repeal of the 1961 Act on 1 April 2026; tax year (checked 6 Oct 2026)
- RBI: FEMA (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, Regulations 1(2), 3(2), 4(1), 5(1), 18(2) (checked 6 Oct 2026)
- RBI: FEMA (Export and Import of Goods and Services) (Amendment) Regulations, 2026, dated 22 September 2026, Paragraph 2, amendment to regulation 5(1) (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services, Paragraphs 4 and 7 (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated 29 February 2012: Reporting under FETERS (purpose codes) (checked 6 Oct 2026)
- IGST Act, 2017: Section 2, Definitions, Clause (6), export of services (checked 6 Oct 2026)
- IGST Act, 2017: Section 16, Zero rated supply, Sub-sections (1) and (3) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 96A, Export under bond or Letter of Undertaking, Sub-rule (1) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 89, Application for refund, Sub-rule (2)(c) (checked 6 Oct 2026)
- Skydo homepage (pricing and fee calculator), Know what you pay; calculator showing GST 18% of transaction fee (checked 6 Oct 2026)
- Razorpay MoneySaver Export Account (International Bank Transfers) pricing, Standard Plan: 0% FX markup, 1% fee, FlashLinks 2%, GST applicable, flat fee of INR 1,000 on transactions below INR 1,00,000, setup and AMC INR 0 (checked 6 Oct 2026)
- Wise India: Fees for receiving money (Business), Conversion fee depends on the currency; eFIRC for every transfer; GST 18% of (conversion fee + eFIRC fee); calculator (checked 6 Oct 2026)
- Revolut India home page, Eligibility (Indian residents aged 18+); plan prices; footer legal entity and RBI PPI and AD-II statements (checked 6 Oct 2026)
Frequently asked questions
Does TCS apply when an Indian freelancer receives money from a foreign client through Wise or Revolut in 2026?
TCS under section 394(1) Table Sl. No. 7 applies to remittances under the Liberalised Remittance Scheme, which covers money resident individuals send abroad. A payment from a foreign client for exported services is an export receipt under the FEMA Regulations, 2026. Check any tax shown on a receipt with your AD bank.
What is the best way to save money on cross-border payment fees and exchange rates in India in 2026?
Total cost is the fee plus the exchange rate margin, so compare both. The comparison table on this page shows Wise and Revolut costs on $500, $2,000 and $5,000 from published pricing. The FEMA Regulations, 2026 apply to every channel. Read about FX markup on export payments.
How much TCS does a bank collect on LRS remittances above Rs 10 lakh in 2026?
Under section 394(1) of the Income-tax Act, 2025, the authorised dealer collects TCS on LRS remittances exceeding Rs 10 lakh. The rate is 2% for education or medical treatment and 20% for other purposes. No TCS applies to an education remittance paid from a loan by a financial institution. Ask your AD bank how it computes the threshold.
Is the USD 250,000 LRS limit counted per bank or per person in a financial year?
The limit is per person. Q 8 of the RBI LRS FAQ says the foreign exchange bought from or remitted through all sources in India in a financial year must stay within USD 250,000. There is no limit on the number of remittances. A resident individual designates one AD bank branch for LRS remittances.
Can a sole proprietor freelancer use the LRS limit to pay for business costs abroad?
Yes, but only within the owner's own LRS limit as an individual. Q 22 of the RBI LRS FAQ says a sole proprietorship has no legal distinction from its owner. If the owner remits USD 250,000 as an individual in a financial year, the proprietorship cannot remit another USD 250,000 under LRS.
Can a company or partnership firm send money abroad under the Liberalised Remittance Scheme?
No. Paragraph A.1 of the LRS Master Direction says the scheme is not available to corporates, partnership firms, HUFs or trusts. Q 21 of the RBI LRS FAQ treats an LLP as a body corporate, so education costs it sponsors for its partners fall outside the partners' LRS limits. Check other business payments with your AD bank.
Does an export payment received through Wise, Revolut or a bank need an EDF and a purpose code in 2026?
Regulation 3(2) of the FEMA Regulations, 2026 requires every exporter of services to file an EDF within 30 days from the end of the invoice month, with no exemption by channel. Under Regulation 18(2), the AD bank reports each receipt under FETERS with a purpose code. Confirm the code with your AD bank.
Is GST charged on export payments received through Wise or Revolut under an LUT?
No IGST is charged where the service meets the five conditions of IGST section 2(6) and the exporter has filed an LUT. Section 16 makes export of services zero-rated, and CGST Rule 96A requires the LUT before export. The payment channel does not change the GST treatment. See GST on export of services.