Quick Summary
Finance Ministry is going to come out with a detailed clarification regarding TCS (Tax Collected at Sources) on Liberalised Remittance Scheme (LRS), a senior Government official said on Friday. TCS is a mechanism to track expenditure from taxation point of view. It is paid by buyers over and above the price to sellers who, in turn, deposit with the Government. New norms for TCS are coming into effect from July 1. However, trade and businesses have a lot of queries. We are certainly going t
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FAQ :
TCS, or Tax Collected at Source, is a mechanism for tracking expenditure from a taxation perspective. Buyers pay it over and above the price to sellers, who then deposit it with the government.
The new norms for TCS are coming into effect from July 1st.
LRS allows resident individuals to remit funds outside India up to $250,000 per financial year for permissible capital/current account transactions, and also includes remittances within India for purposes like gifts or loans to NRIs.
Budget 2023 increased the TCS rate from 5% to 20% for remittances other than for education/medical purposes, removed the ₹7 lakh threshold for these remittances, and extended TCS to LRS remittances within India.
Yes, the usage of international credit cards for expenses during visits outside India has been brought under LRS. However, transactions up to ₹7 lakh using international credit cards or debit cards will be excluded from LRS.
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