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.