New tax rules: The new Tax Collection at Source (TCS) rates will be applicable from October 1, 2023. Whether you are going on a foreign trip, investing in foreign stocks, mutual funds or cryptocurrencies, or going abroad for higher education, you will have to pay TCS if you spend more than the prescribed amount in a financial year. Gulfhindi.com Explains for you the new TCS system starting from next month.
The 20% TCS rule will be applicable from October 1, 2023.
Under the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India (RBI), you can remit up to $250,000 in a financial year. From October 1, 2023, 20% TCS will be applicable on all foreign remittances to the extent of more than Rs 7 lakh in a financial year.
What will be the TCS on remittance for foreign education from October 1, 2023?
Under LRS, there will be no TCS on remittances less than Rs 7 lakh for education expenses. If remittance above Rs 7 lakh is received from an approved financial institution, 0.5% TCS will be applicable.
New TCS rates on medical expenses from October 1, 2023:
5% TCS will be applicable on any outbound remittance for medical treatment crossing Rs 7 lakh.
How much will be the TCS on foreign travel packages from October 1, 2023?
5% TCS will be applicable on foreign travel packages up to Rs 7 lakh and 20% TCS will be applicable on more than Rs 7 lakh.
| Nature of payment | TCS rates until September 30, 2023 | New TCS rates from October 1, 2023 |
| LRS for education financed by loan | Nil up to Rs 7 lakh | Nil up to Rs 7 lakh |
| 0.5% above Rs 7 Lakh | 0.5% above Rs 7 Lakh | |
| LRS for medical treatment/education (other than financed by loan) | Nil up to Rs 7 Lakh | Nil up to Rs 7 Lakh |
| 5% above Rs 7 Lakh | 5% above Rs 7 Lakh | |
| LRS for other purposes such overseas investments or gifts | Nil up to Rs 7 Lakh | Nil up to Rs 7 Lakh |
| 5% above Rs 7 Lakh | 20% above Rs 7 Lakh | |
| Purchase of Overseas tour program package | 5% (without threshold) | 5% till Rs 7 Lakh, 20% thereafter |
