Important Changes Regarding Liberalized Remittance Scheme (LRS) and Tax Collected at Source (TCS)
The Liberalized Remittance Scheme (LRS)’s new Tax Collected at Source (TCS) rule, which includes a higher rate of 20% on overseas remittances, has been postponed by three months, according to the Ministry of Finance. Instead of taking effect on July 1, 2023, the rule will now take effect on October 1. This decision was made to give banks and card networks sufficient time to set up the.
TCS applicable Rates on LRS from 1st October 2023:
LRS for education financed by loan: There are no changes in TCS rate on foreign remittance for education financed by loan. Nil up to Rs. 7 lakh, and 0.5% above Rs. 7 lakh.
LRS for medical treatment/education (other than financed by loan): There are no changes in TCS rate on foreign remittance for medical treatment and education (other than financed by loan.) Nil up to Rs. 7 lakh, and 5% above Rs. 7 lakh.
LRS for other purposes: Earlier rate of TCS on foreign remittance for other purposes is “Nil up to Rs. 7 lakh and 5% above Rs. 7 lakh” and as per new announcement by Ministry of Finance TCS on foreign remittance for other purpose is “Nil up to Rs. 7 lakh and 20% above Rs. 7 lakh”.
Purchase of overseas tour program package: Earlier rate of TCS on foreign remittance for purchase of overseas tour program package 5% without any threshold limit and as per new announcement by Ministry of Finance TCS on foreign remittance for purchase of overseas tour program package is 5% till Rs. 7 lakh, and 20% above Rs. 7 lakh.
FAQ's
Nil up to Rs. 7 lakh, and 0.5% above Rs. 7 lakh.
Nil up to Rs. 7 lakh, and 5% above Rs. 7 lakh.
Earlier rate of TCS on foreign remittance for purchase of overseas tour program package 5% without any threshold limit and as per new announcement by Ministry of Finance TCS on foreign remittance for purchase of overseas tour program package is 5% till Rs. 7 lakh, and 20% above Rs. 7 lakh.
Nil up to Rs. 7 lakh, and 5% above Rs. 7 lakh.
