Forex Card vs Cash: A Travel Money Guide for Indians

Every trip abroad comes with the same money questions: how much cash to carry, whether to lean on a card, what the charges really are, and how much tax you pay on the forex you buy. This guide covers the practical answers for an Indian traveller, whether you are heading to the World Cup or anywhere else.

How a forex card works

A forex card is a prepaid card you load with foreign currency before you travel. You buy, say, US dollars at the rate on the day, the dollars sit on the card, and when you spend abroad the amount is taken off in dollars. Because you bought the currency in advance, the rupee moving while you are away does not change what you have already loaded.

Most forex cards hold more than one currency at a time, which suits a multi-country trip. They run on the Visa or Mastercard networks, so they work wherever those cards are accepted, and you can tap, swipe, shop online and withdraw at ATMs. You can usually top them up while travelling if you run low. The Matrix Forex Card, for example, runs on Visa and holds up to 28 currencies.

Forex card vs cash: when to use which

For most trips, a card carries the bulk of the spending and cash covers the rest. A useful starting split is around 80 percent on the card and 20 percent in cash, with a little more in cash for places where smaller vendors do not take cards.

A forex card has a clear edge over an ordinary international credit or debit card. Those cards build a foreign-currency markup into every overseas transaction, with GST applied on top. A forex card loaded with the local currency does not add that per-transaction markup when you spend in the currency you loaded. Cash, meanwhile, is for tips, small vendors, local transport and the occasional place that takes nothing else. Carrying a little is sensible; carrying a lot is neither safe nor necessary.

Cross-currency charges, and how to avoid them

This is the charge that surprises people who do not load the right currencies.

A forex card holds the specific currencies you load onto it. When you spend in a currency that is on the card, there is no conversion. When you spend in a currency that is not on the card, the card converts from a currency you do hold to cover the payment, and a cross-currency charge applies to that conversion, every time.

Avoiding it is straightforward. Load the currencies for the countries you are actually visiting. On a single-country trip that is one currency. On a multi-country trip, load each currency you will spend, so the card is never converting on the fly. If you are visiting a country whose currency you cannot load, plan to use local cash there instead.

How much cash you can carry abroad

For most destinations, you can carry up to USD 3,000 per trip in foreign currency notes. The rest of your travel money goes on a forex card, as a wire transfer, or as a traveller's cheque.

A few places are treated differently. For travel to Iran, Russia and certain other countries, the whole amount may be carried in cash. For Iraq and Libya, the cash limit is USD 5,000 per trip. When you return, you are allowed to keep up to USD 2,000 in foreign currency notes; anything above that should be sold back within about 180 days of coming home.

The LRS limit, in plain terms

The Liberalised Remittance Scheme, or LRS, is the framework that lets a resident Indian send or spend money abroad. The limit is USD 250,000 per person per financial year.

That single allowance covers most purposes: travel, education, medical treatment, family support, gifts, investments and buying property abroad. It applies to resident individuals, not to companies, and NRIs come under separate rules. For a holiday or a World Cup trip you are nowhere near the ceiling, so the limit itself is rarely the issue. The part worth understanding is the tax that sits inside it.

TCS on foreign spending: what you actually pay

TCS, tax collected at source, is collected when you buy forex above a threshold. It is now set under Section 394 of the Income-tax Act 2025. Here is what applies.

The threshold is ₹10 lakh per person in a financial year. Below that, there is no TCS on your forex for travel. Above it, the rate depends on the purpose.

For travel, gifts, family support and investments, the rate is 20 percent on the amount above ₹10 lakh. For education and medical treatment, it is 2 percent on the amount above ₹10 lakh. Overseas tour packages are charged 2 percent. Education funded by a loan from a recognised institution carries no TCS at all.

Loading a forex card for travel sits in the 20 percent category above ₹10 lakh. The Budget did not extend the lower 2 percent rate to card loading, so a travel card load is treated like any other travel forex once you cross the threshold. For most travellers, who stay under ₹10 lakh in a year, none of this applies.

Getting your TCS back

TCS is not a final tax. It is closer to advance tax sitting against your name.

The amount collected shows up in your Form 26AS, linked to your PAN. When you file your annual income tax return, you claim it as a credit against your total tax. If your tax due is lower than the TCS already collected, the difference comes back as a refund. So even where TCS does apply, it is money adjusted or returned, not money lost.

Buying forex the smart way

Wherever you buy currency, the rate carries a markup, and it is usually invisible. When a bank or exchange sells you foreign currency, it does not show a fee. It widens the exchange rate instead, and that gap is the margin. The typical range is 2 to 5 percent.

Two habits keep this down. Buy ahead rather than at the airport, where the margin is widest. And buy from a provider that quotes against the live interbank rate, the rate banks trade at between themselves, rather than a marked-up retail rate. Matrix Forex sells at the interbank rate with no markup added. RBI rules also let you buy forex up to 60 days before you travel, so there is no need to leave it to the last day.

A pre-trip money checklist

Work out roughly what you will spend, and keep it within the LRS limit, which for almost everyone is not a concern. Load a forex card with the currencies of the countries you are visiting, and keep cash to a sensible amount for tips and small spends. Buy your forex ahead of time at a clear rate. Check whether your total foreign spending for the year is anywhere near ₹10 lakh, and if it is not, TCS will not apply. Keep your card and a little cash in separate places while you travel.

Frequently asked questions

How does a forex card work?

You load it with foreign currency before you travel, at the rate on the day you buy. When you spend abroad in a loaded currency, the amount comes off the card in that currency, with no conversion. It runs on the Visa or Mastercard networks, so you can tap, shop online and withdraw at ATMs.

Is a forex card better than cash?

For most spending, yes. It is safer than carrying a lot of cash and avoids the per-transaction markup that ordinary international cards add. Keep some cash for tips and small vendors, and put the rest on the card.

Is there TCS on a forex card?

Only if your total foreign spending crosses ₹10 lakh in a financial year. Below that, loading a forex card carries no TCS. Above it, a travel card load is charged 20 percent on the amount over ₹10 lakh, which you can claim back when you file your return.

What are cross-currency charges on a forex card?

They apply when you spend in a currency that is not loaded on the card. The card converts from a currency you do hold, and a fee applies to that conversion. Loading the right currencies for your destinations avoids it.

What is the LRS limit for an individual?

USD 250,000 per resident individual per financial year, covering travel, education, medical treatment, family support, gifts and investments. It does not apply to companies, and NRIs have separate rules.

How do I claim a TCS refund?

The TCS collected appears in your Form 26AS against your PAN. You claim it as a credit when filing your income tax return, and if your tax due is lower than the TCS collected, the balance is refunded.

Read next: our combined World Cup money guide, and the country guides for the USA, Canada and Mexico if you are travelling for the tournament.