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Kotak Bank Outward Remittance

Outward Remittance also known as Telegraphic transfer/Transfer/Wire Transfer/Swift Transfer is the fastest and the most convenient way to send money to a beneficiary account anywhere in the world*.

Be it education fees, living expenses, or family maintenance, sending money abroad to your friends and family will be just few clicks away. You can do that with any of the 15 currencies (as mentioned below) making money transfer easier and more accessible.

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List of 15 currencies

AED - UAE Dirhams	AUD - Australian Dollars
CAD - Canadian Dollars	CHF - Swiss Franc
DKK - Danish Krone	EUR – Euro
GBP - UK Pounds	HKD - Hong Kong Dollars
JPY - Japanese Yen	NZD - New Zealand Dollars
SAR - Saudi Arabian Riyal	SEK - Swedish Krone
SGD - Singapore Dollars	USD - US Dollars
ZAR – South African Rand

What is LRS?

Under LRS (Liberalised Remittance Schemes), all resident individuals (including minors) are allowed to remit up to USD 250,000 per financial year (April-March) for any permissible current or capital account transaction, or a combination of both.

Frequently Asked Questions

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 1^st 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 this TCS provision?

All remittances more than Rs. 7 lakhs in a financial year done under the LRS will be liable for a 20% TCS except if the remittance is for education paid through a loan obtained from any financial institution, where the TCS rate would be 0.5%.

The exemption from TCS on remittance overseas under LRS for amounts less than Rs. 7 lakh in a financial year will not be applicable, if the amount is being remitted for the purchase of overseas tour program package. Therefore, there is no monetary threshold prescribed for remittance for the purchase of overseas tour program package and bank will collect TCS on the entire amount irrespective of its value.

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

TCS at 0.5% shall be applicable on the amount exceeding Rs. 7,00,000 in a financial year under LRS, if the amount remitted is obtained out of a loan from a Financial Institution for pursuing education.

For this purpose, ‘financial institution’ means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf.

E.g. if the total amount remitted under LRS in a financial year is Rs. 8,00,000 for pursuing overseas education, TCS at 0.5% will be applicable on Rs. 1,00,000 (Rs. 8,00,000 – Rs. 7,00,000).

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