Tax Collected at Source (TCS) on Liberalised Remittance Scheme (LRS)
Important Information:
- International remittances made under the Liberalised Remittance Scheme (LRS) are subject to TCS provisions introduced in October 2020.
- TCS is applicable when the aggregate remittance amount exceeds INR 10 lakh during a financial year.
- From April 01, 2026 onwards, updated TCS rates will be applicable on transactions covered under LRS, as per the revised guidelines below.
| Sr No | Purpose | Revised charges w.e.f. April 01, 2026 |
|---|---|---|
| 1 | Remittance out of an education loan obtained from a financial institution | Nil |
| 2 | Remittance for Medical Treatment / Education (other than where education is financed through a loan) | Nil up to INR 10 lakh 2% above INR 10 lakh |
| 3 | Other LRS purposes | Nil up to INR 10 lakh 20% above INR 10 lakh |
| 4 | Overseas tour program purchase | Flat 2% |
Frequently Asked Questions (FAQs):
TCS on foreign remittances under the Liberalised Remittance Scheme (LRS) is applicable on remittance transactions undertaken on or after October 1, 2020. The tax is levied on all remittances made under LRS, subject to the applicable provisions, thresholds and rates prescribed under the Income-tax Act from time to time.
The tax will be applicable on all remittance(s) that fall under the LRS.
All remittances more than INR 10 lakhs in a financial year done under the LRS will be liable for a 20% TCS except if the remittance is for education paid through a loan obtained from any financial institution, where the TCS rate would be NIL. For Overseas Tour Package, TCS would 2 % without any threshold.
No TCS shall be applicable on the amount if the amount remitted is obtained out of a loan from a Financial Institution for pursuing education.
TCS at 2% shall be applicable on remittances exceeding INR 10 lakhs in a financial year.
TCS at 2% will be applicable on the total amount remitted and Bank will collect TCS on the entire amount irrespective of its value.
All forex transactions under LRS will be included in threshold limit of INR 10 lakhs except Overseas tour package and Education remittance Under Loan.
Yes, TCS will be applied on LRS transactions exceeding INR 10 lakhs if foreign exchange facility is availed through FCY Cash withdrawal at branches / loading Forex cards
No. GST will be applicable on the tax collected as TCS. However, GST will be applicable on the currency conversion, remittance service charge and other charges.
- If the remitter is liable to deduct tax at source under any other provision of the Income Tax Act.
- If the remitter is Government or any other person notified by the Government.
- Remittance made by Non-Residents, Diplomats and Non-Individuals.
- LRS remittance made from RFC (Resident Foreign Currency) account.
- If the aggregate amount of remittances made during the financial year including the current transaction is less than INR 10 lakhs irrespective of whether the customer is a Specified or Non-Specified individual.
- Seller of overseas tour program package has already collected TCS.
Yes, remitter / customer can claim credit for the tax collected by the Bank while filing for their tax returns as TCS is deemed to be a payment of tax on behalf of the person from whom the amount has been collected.
The Bank will not refund TCS collected which is paid to tax department. However, credit for the same shall be available to the remitter/customer and they can claim refund by filing income tax return.
TCS will be applicable for all foreign cash withdrawals through ATM, POS or e-commerce, including transactions done on Foreign Merchants or sites which offer Dynamic Currency Conversion (DCC) transactions.
The TCS charges are applicable on Debit Card remittance transaction beyond aggregate remittance spends of INR 10 Lakh in an annual year. For the purpose of computing the limit of INR 10 lakhs, the aggregate of all Forex withdrawals availed by the customer under LRS across all the products (e.g. Outward Remittances, Forex Cards, Debit Card, etc.) is taken into consideration.
