Moving Money From India to the US for a Home Down Payment
Funding a US home purchase with Indian savings? Here's how to navigate the LRS $250k limit, TCS, gift documentation, and getting money to escrow without delays.
Rohan Gupta
Updated June 1, 2026 · 9 min read
Many NRIs fund part of their first US home with savings or family money from India. It's completely legal — but a large international transfer into a US escrow account under a closing deadline is exactly where things go wrong if you haven't planned. Between India's Liberalised Remittance Scheme limits, TCS, lender "source of funds" rules, and US gift documentation, a rushed transfer can delay your closing or trigger questions. Here's how to move down-payment money from India to the US smoothly.
In a nutshell
You can fund a US down payment from India under the LRS ($250,000 per person per financial year). Large remittances may incur 20% TCS (recoverable on the sender's Indian return) and lenders will demand a paper trail showing the source of funds. If parents send the money, document it as a gift (lender gift letter + US Form 3520 if over $100k). Start the transfers early to meet your closing date.
Key takeaways
- The LRS caps remittances at $250,000 per individual per Indian financial year — use multiple family members for larger sums.
- Remittances above ₹7 lakh may attract 20% TCS, recoverable on the Indian return.
- Lenders require a documented "source of funds" — keep statements and a clear trail.
- If family gifts the money, get a lender gift letter; file Form 3520 if foreign gifts exceed $100k.
- Season the funds in your US account before closing where possible.
- Start transfers weeks early — escrow deadlines don't forgive bank delays.
The LRS limit and how families work around it
Under India's Liberalised Remittance Scheme, each resident individual can send up to USD 250,000 per financial year (April–March) abroad. For a down payment larger than that, families commonly have multiple members each remit within their own limits (for example, both parents), legally aggregating more than $250k. Plan this across the right people and, if needed, across two financial years.
TCS on the transfer
Remittances above ₹7 lakh in a financial year generally attract 20% Tax Collected at Source for non-education/medical purposes. Important: TCS is recoverable — the resident sender credits it against their Indian income tax or claims a refund when filing. It affects cash flow now, not the final cost. The full mechanics are in our TCS guide. (Separately, mind the new US 1% remittance fee by funding electronically.)
Lenders will ask: "where did this money come from?"
US mortgage lenders scrutinize large deposits to prevent fraud and money laundering. Any big inflow into your account before closing must have a documented source:
- Keep Indian bank statements showing the money's origin (your savings, a property sale, etc.).
- Retain the wire transfer records linking India to your US account.
- If it's a gift from family, get a signed gift letter stating it's a gift with no repayment expected.
Undocumented large deposits can stall or sink your loan approval.
If parents or family provide the funds
A family gift is a common and clean way to fund a down payment, but handle both sides:
- US lender side: a gift letter is usually required so the lender knows it's not a hidden loan increasing your debt.
- US tax side: the gift isn't taxable to you, but if foreign gifts exceed $100,000 in a year you must file [Form 3520](/articles/gifting-money-india-tax-implications) (disclosure, no tax).
- India side: the sending relatives are subject to the LRS limit and TCS.
Season your funds. Lenders prefer to see down-payment money sitting in your US account for about 60 days ("seasoned") before closing, which avoids extra source-of-funds scrutiny. If you can, transfer well ahead of your offer rather than days before closing.
A clean transfer timeline
- Confirm your total down payment and who's contributing.
- Map the LRS limits across family members; check TCS impact.
- Transfer early (ideally 60+ days before closing) to season the funds.
- Fund electronically to avoid the US remittance fee and get better rates.
- Collect documentation: Indian statements, wire records, gift letters.
- File Form 3520 if foreign gifts exceed $100k that year.
- Hand the paper trail to your lender proactively.
Frequently asked questions
How much can I transfer from India for a US home?
Each resident can remit up to $250,000 per Indian financial year under the LRS. Families often combine multiple members' limits for a larger down payment.
Is there tax on transferring my own money for a house?
Sending your own funds isn't US income tax. Indian TCS (20% above ₹7 lakh) may apply to the resident sender but is recoverable on their Indian return.
What does the lender need to see?
A documented source of funds: Indian bank statements, wire records, and — if it's family money — a gift letter confirming no repayment is owed.
Do I need to report the money to the IRS?
The transfer of your own money isn't reportable as income, but a foreign gift over $100,000 in a year requires Form 3520, and Indian accounts may trigger FBAR/FATCA.
The bottom line
Funding a US down payment from India is routine when you plan it: work within the LRS limits (combining family members if needed), expect recoverable TCS, fund electronically, and — above all — build a clean documented paper trail for your lender. Transfer early to season the funds and meet your closing date, document any family gifts properly, and file Form 3520 if required. Do this and your Indian savings become US equity without a single closing-day scramble. Then weigh the bigger decision in our rent vs. buy guide.