Corporate forex management for business travel from India — cards, cash and compliance
By Kabir Malhotra (Kabir Malhotra writes about how Indian travel buyers actually pay — UPI vs credit card vs forex card surcharges, reward-point math on the top travel credit cards, RBI tokenisation, EMI-on-flights and the small fees that compound across a year of bookings.) · Published · Last updated · 10 min read
A practical 2026 guide to corporate forex for business travel from India: choosing between forex cards, corporate credit cards and cash, staying compliant with RBI and TCS rules, and writing a policy that actually works.
Quick answer
For most Indian business trips, a multi-currency forex card covers planned spend with locked rates and clean reconciliation, a corporate credit card handles hotels and emergencies, and a small cash float manages tips and taxis. Keep total LRS-route remittances mindful of the ₹10 lakh TCS threshold per person per financial year, claim TCS back against tax, and insist on GST invoices for forex purchases. Always verify current rates and rules officially.
Forex card vs corporate credit card vs cash
Each instrument has a clear job. Using all three deliberately beats relying on any one.
- Multi-currency forex card: the workhorse for budgeted travel. You load specific currencies at a locked rate, so the employee is insulated from rate swings and you avoid the foreign-transaction markup of an Indian rupee card. Best for daily meals, local transport and incidentals. Watch for issuer fees (loading, reload, ATM withdrawal, cross-currency, inactivity).
- Corporate credit card: best for large, named bookings — hotels, flights, conference fees — and for emergencies. It offers strong dispute protection and consolidated statements, but rupee-denominated cards typically add a foreign-currency markup (commonly around 2–3.5%) plus applicable taxes, so it is not the cheapest way to fund everyday cash spend.
- Cash: keep a modest float for tips, street vendors, and places where cards fail. Over-loading cash invites loss, theft and reconciliation gaps.
A common, efficient mix: forex card for daily spend, corporate card for big-ticket and online bookings, and a small cash buffer.
RBI limits and LRS compliance
Foreign-exchange purchases by residents fall under FEMA and, for individuals, the Liberalised Remittance Scheme (LRS), which permits up to USD 250,000 per person per financial year across permitted current and capital account transactions. Genuine business travel funded by an employer is generally treated as a business expense rather than the traveller's personal LRS, but the picture depends on how the spend is structured, so confirm treatment with your bank and a chartered accountant.
The compliance point most teams get wrong is TCS (Tax Collected at Source). For FY 2025-26, LRS remittances are exempt from TCS up to ₹10 lakh per person per financial year; above that, the rate depends on purpose. The headline figures widely reported are: general remittances 20% above ₹10 lakh; self-funded education and medical 5% above ₹10 lakh (education via an approved loan attracts nil); and overseas tour packages 5% up to ₹10 lakh then 20% beyond. TCS is not a tax in itself — it is credited against the remitter's income-tax liability and can be claimed back — but it is a real cash-flow cost. Rates and thresholds change with each budget, so verify the current position officially before large transfers.
GST on forex services
Buying foreign exchange in India attracts GST on the service, calculated on a slab of the transaction's rupee value rather than on the full amount. The structure (set out in the GST rules) charges a small percentage of the 'taxable value', which itself is a tiered fraction of the deal size, with a minimum and a cap. In practice the GST on a typical business forex load is modest, but it is real and recoverable as input tax credit if you hold a proper tax invoice in the company's name and GSTIN.
The actionable rule: always obtain a GST-compliant invoice from the bank or forex provider showing the company name, GSTIN and the GST charged. Card-network markups and bank charges similarly carry GST — capture those invoices too so finance can claim eligible credit. Confirm the current slab values with your provider, as they are revised periodically.
Corporate forex policy best practices
A good policy turns ad-hoc currency buying into a controlled process:
- Default to forex cards for budgeted per-diem spend, with a named issuer and pre-agreed fee schedule.
- Set per-trip load limits by destination tier, with a documented top-up route for genuine overruns.
- Centralise procurement through one or two approved forex partners to get better rates and consistent GST invoicing.
- Define the cash float cap (e.g. a fixed small amount per trip) and require receipts for cash spend above a threshold.
- Track the ₹10 lakh TCS threshold at the individual level across the year so finance can plan cash flow and reclaim TCS.
- Mandate DCC refusal: instruct travellers to always pay in the local currency, never the card's home-currency conversion offered at terminals and ATMs.
- Reconcile within a fixed window (e.g. 7–10 working days post-trip) with statements and invoices uploaded to your expense tool.
Common mistakes and how to avoid them
The recurring, avoidable errors:
- Accepting Dynamic Currency Conversion (DCC). When a foreign terminal or ATM offers to bill in rupees, it applies a poor rate plus markup. Always choose the local currency. This single habit saves more than most fee negotiations.
- Ignoring TCS planning. Treating the ₹10 lakh threshold as 'someone else's problem' leads to surprise deductions and unclaimed credit. Track it per person and reclaim it at filing.
- Losing GST invoices. Forex and card charges carry recoverable GST; missing invoices mean lost input credit. Make the invoice a mandatory expense-report field.
- Loading too much cash. It is the least traceable, most loss-prone option. Keep floats small.
- Leaving balances stranded on forex cards. Unused foreign currency may be locked at a poor reload/encashment spread. Load realistically and encash promptly after the trip.
- One instrument for everything. Using a rupee credit card for all daily spend abroad piles up avoidable markup; using only cash kills auditability. Match the tool to the spend.
Frequently asked questions
What is the LRS limit for foreign exchange from India?
The Liberalised Remittance Scheme allows resident individuals to remit up to USD 250,000 per person per financial year across permitted current and capital account transactions. Employer-funded business travel is generally a business expense rather than the traveller's personal LRS, but confirm the treatment with your bank and a chartered accountant.
When does TCS apply to forex for business travel?
For FY 2025-26, LRS remittances are exempt from TCS up to ₹10 lakh per person per financial year. Above that, rates depend on purpose, with general remittances widely reported at 20%. TCS is creditable against income tax and refundable, but it affects cash flow. Verify the current rate officially before large transfers.
Is a forex card better than a corporate credit card abroad?
For everyday budgeted spend, yes — a forex card locks the rate and avoids the foreign-transaction markup that rupee credit cards add. Use the corporate credit card for big-ticket bookings like hotels and flights and for emergencies, where its dispute protection matters. The best policy uses both deliberately.
Is GST charged when a company buys foreign currency?
Yes. GST applies to the forex service, calculated on a tiered taxable value of the rupee transaction rather than the full amount, with a minimum and a cap. It is recoverable as input tax credit if you hold a tax invoice in the company name and GSTIN, so always collect a GST-compliant invoice.
What is DCC and why should travellers refuse it?
Dynamic Currency Conversion is when a foreign terminal or ATM offers to charge you in rupees instead of the local currency. It applies a worse exchange rate plus a markup, costing you more on every transaction. Always choose to be billed in the local currency to get your card network's standard rate.
Can the company claim TCS back?
TCS is not an additional tax; it is collected on behalf of the income-tax department and credited to the remitter's account. It can be adjusted against tax liability or refunded when returns are filed. The practical issue is cash flow and record-keeping, so track TCS per person and reconcile it at filing.
How much cash should employees carry on a business trip?
Keep a small float for tips, taxis and card-failure situations — typically a fixed modest amount per trip defined in policy. Cash is the least traceable and most loss-prone instrument, so route the bulk of spend through a forex card and corporate credit card and require receipts for larger cash expenses.
What should a corporate forex policy cover?
Define the default instrument (forex card for per-diems), per-trip load limits by destination, an approved forex partner for consistent rates and GST invoices, a cash float cap, a rule to always refuse DCC, tracking of the per-person TCS threshold, and a fixed reconciliation window with mandatory invoice uploads.