What is Liberalised Remittance Scheme (LRS)?

Under the Liberalised Remittance Scheme (LRS), all resident individuals (as defined under FEMA 1999), including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. It is mandatory for the resident individual to provide his/her Permanent Account Number (PAN) for all transactions under LRS.

What is the effective date of applicability of the TCS on foreign remittances under LRS ?

TCS on foreign remittance under LRS is effective on any remittance transaction under LRS on or after 1st October, 2020.

What are the different purposes on which the tax collection is applicable?

The tax will be applicable on all remittance(s) that fall under the LRS of RBI.

What all transactions will be impacted by the New TCS rule?

We would like to update you on the revised TCS rates on outward remittances by Resident Individuals under Liberalised Remittance Scheme (LRS) effective from 1st April 2025. All remittances by Resident Individuals under LRS will attract TCS of 20% on amount exceeding INR 10 lakhs in a financial year except remittances for education and medical treatment where TCS applicable will be 5%

What is the new tax implication on remittances for pursuing overseas education?

Effective 1st April, 2025, outward remittances paid through an education loan obtained from any financial institution, TCS will not be applicable on such remittances.

What is the tax implication if the amount remitted for pursuing education abroad is owned funds or out of loans from Non-specified institutions/private parties?

TCS at 5% shall be applicable on remittances exceeding INR 10 lakhs in a financial year.

What is the tax implication of remittances for the purchase of overseas tour program package under LRS?

TCS at 5% will be applicable till INR 10 lakhs and 20% thereafter in a financial year under LRS.

Will TCS be applicable if foreign exchange facility is availed in Cash / Forex cards?

Yes, TCS will be applied on LRS transactions exceeding Rs. 10 lakhs if foreign exchange facility is availed through FCY Cash withdrawal at Branches / loading Forex cards.

What is the applicable TCS if PAN /AADHAR is not updated on Bank's records?

It is mandatory for the resident individual to provide his/her Permanent Account Number (PAN) for all transactions under LRS.

Will GST be applied on the TCS amount?

No GST will be applicable on the tax collected as TCS. However, GST will be applicable on the currency conversion, remittance service charge and other charges.

If remitter/ customer can avail tax credit of the TCS?

Yes, remitter / customer can claim credit for the tax collected by the Bank while filing for their tax returns as TCS is deemed to be a payment of tax on behalf of the person from whom the amount has been collected.

What if tour package/educational program etc. is subsequently cancelled or not persuaded?

The Bank will not refund TCS collected by it and paid to Government. However, credit for the same shall be available to the remitter/customer and they can claim refund by filing income tax return.