TCS to be levied on foreign tax remittances: All you need to know - Hindustan Times
close_game
close_game

TCS to be levied on foreign tax remittances: All you need to know

Hindustan Times, New Delhi | Byhindustantimes.com | Edited by Karan Manral
Sep 10, 2020 04:04 PM IST

A TCS of 5% was announced in Union Budget 2020, which was presented in February.

Starting October 1, any amount being sent abroad to buy foreign tour packages, as well as every other foreign remittance of over 7 lakh, will attract a tax-collected at source (TCS), unless the remittance is from an income that is already tax-deducted at source (TDS).

A customer hands Indian currency notes to an attendant at a fuel station in Mumbai, India, August 13, 2018. REUTERS/Francis Mascarenhas/Files(REUTERS)
A customer hands Indian currency notes to an attendant at a fuel station in Mumbai, India, August 13, 2018. REUTERS/Francis Mascarenhas/Files(REUTERS)

The Reserve Bank of India’s (RBI) liberalised remittance scheme (LRS) allows an individual to remit up to $250,000 every year. The provision to collect tax on remittances was introduced in the Finance Act 2020.

Hindustan Times - your fastest source for breaking news! Read now.

Here’s all you need to know about the TCS:

• A TCS of 5% was announced in Union Budget 2020. This rate is for foreign tour packages; for, other foreign remittances, it will apply only for an amount exceeding 7 lakh.

• However, in case of education-related foreign remittances funded by loans, a TCS of 0.5% will be levied for an amount above 7 lakh.

• While the rate of TCS is 5%, it will be 10% in case PAN or Aadhaar is not provided to an Authorised Dealer of the foreign exchange in question. In case of foreign travel, the TCS is collected by the travel operator.

• The TCS will not be applicable if you make all arrangements of foreign tour on your own. It will also not apply if the remitter is subject to the TDS, under the Income Tax Act, 1961.

• If tax has already been paid as TDS, and still the TCS is levied, you can claim a refund from the TCS.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Monday, March 18, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On