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ARTICLE · 07 JUNE 2023

Applicability Of TCS For Remittances Under LRS

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Section 206C of the Income Tax Act, 1961 provides for the collection of tax at source ("TCS") on foreign remittance through the Liberalised Remittance Scheme ("LRS") and on sale of overseas tour packages.

IndiaTax
kumarmanglam Vijay
kumarmanglam Vijay
Divyam Mittal
Divyam Mittal
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Section 206C of the Income Tax Act, 1961 provides for the collection of tax at source ("TCS") on foreign remittance through the Liberalised Remittance Scheme ("LRS") and on sale of overseas tour packages. With effect from July 1, 20231, TCS @ 20% (from the current 5%) will apply on overseas tour packages and remittances under LRS (other than for education and medical treatment purposes) without any threshold. In case of remittances for education (other than education loans taken from specified financial institutions) and medical treatment exceeding INR 7,00,000 (Indian Rupees seven lakh) in a financial year, TCS at the rate of 5% will apply. If the education loan is obtained from a specified financial institution, then TCS @ 0.5% is to be collected.

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