I've used 95% alcohol when tincturing fresh material but of course the tincture does not end up as 95%, more like 60%. I have never heard of a maximum permissible limit.
@ Apurva Priyadarshi the formulation of tincture contain alcohol in 25-90 %. But when used for therapeutic activity it is diluted with water as per potency of formulation.
Your question is too general. some of medicine are soluable and some of them are insoluble but most of them are Relatively soluble so we can add alcohol to dissolve them. What do you want to know exactly?