An overview of TCS applicable on outward remittance made under Liberalised Remittance Scheme [“LRS”] w.e.f. 01.07.2023 [Section 206C(1G)(a)] :

1. 1. If amount of remittance is less than INR 7 lakhs in a financial year and is for the purpose of education or medical treatment – NIL2. If amount of remittance is equal to or greater than INR 7 lakhs in a financial year and is for the purpose of education or medical treatment – 5% of amount in excess of INR 7 lakhs3. If amount of remittance is on account of repayment of loan obtained from any financial institution as defined in section 80E – 0.50% of amount in excess of INR 7 lakhs4. If remittance is for any other purpose and no limit of minimum amount being remitted – 20%

      Key Points :
      a) No TCS on remittance made by NRI or PIO or Foreign Nationals as the LRS is for residents under FEMA.

      b) Amount remitted in foreign bank account of the person for the depositing fee or direct deposit to foreign college / institution is considered as for the purpose of education.

      c) Amount remitted in foreign bank account of the person for the medical treatment or direct deposit to foreign hospital is considered as for the purpose of medical treatment.

      d)   Following are the few remittances covered under LRS on which TCS @ 20% is applicable even if the amount remitted is less INR 7 lakhs :

      – Maintenance of close relatives living abroad
      –  Gift or Donation
      –  Private visit to any country (except Nepal and Bhutan)
      –  Travel for business, attending international conference, seminar, specialised training, apprentice training