TCS on International Money Transfers Part of section 206C known as Under LRS was first implemented in Budget 2020. Budget 2023 introduced changes to TCS rules. Learn more.
This document covers
Foreign Remittance means transfer of money from a sender in one country to sender in another country. There are 2 types of remittances.
Individuals can avail foreign exchange facilities for the following purposes within the LRS limit of 2,50,000 USD
|S.No||Type of Remittance||Current TCS Rate||Proposes TCS Rate from 01st July 2023|
|1||Foreign Tours and Travel||5% without any threshold||20% without threshold|
|2||Purpose of Education through Loan||0.5% beyond an annual aggregate remittance of Rs 7 lakhs||0.5% beyond an annual aggregate remittance of Rs 7 lakhs|
|3||Purpose of Education||5% beyond an annual aggregate remittance of Rs 7 lakhs||5% beyond an annual aggregate remittance of Rs 7 lakhs|
|4||Any other type||5% beyond an annual aggregate remittance of Rs 7 lakhs||20% without threshold|
For Comprehensive Understanding, refer at Changes from Budget 2023
The budget 2023 proposal to raise the TCS on overseas/Foreign Tours and Travel is a difficult decision, but it is all in the name of encouraging much-needed domestic tourism.
Proposed changes may have an impact on businesses that are more aligned with such travel packages, as consumers may be hesitant to spend extra through TCS, even if it is money that will be returned in the form of TCS Credit when filing income taxes.
Today , overseas tour operators and travel companies are being hit hard by two major setbacks following COVID-19: the depreciated rupee against the dollar and the 20% TCS that travellers must deposit.