From 1st Oct 2020, all foreign transactions including debit card transactions under Liberalized Remittance Scheme (LRS) will be subject to tax collection at source (TCS) under section 206C of the Income-tax Act, 1961. TCS of 5% will be applicable to each and every transaction. If you have not exceeded ₹7 lakhs, then your 5% deduction will be refunded to the source account within 12 days. If you have exceeded ₹5 lakhs in the financial year, then 5% will be applicable under LRS. TCS at the rate of 0.50% shall be collected on foreign remittance under LRS if the amount being remitted is towards education abroad and is out of a loan obtained from any financial institution in India. As defined under section 80E of the Income Tax Act.
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Modified on: Mon, 31 May, 2021 at 3:43 PM
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