Tax Collected at Source (TCS) on Liberalized Remittance Scheme (LRS)

As per the amendment under section 206C of the Income Tax Act, 1961, an authorized dealer who receives an amount, for remittance under the Liberalized Remittance Scheme (LRS) shall be liable to collect Tax Collected at Source (TCS) on LRS transactions. This is applicable on all LRS transactions, including international debit card and UPI transactions.

Transactions on which TCS is applicable

  • LRS outward remittance transactions through branch or online.
  • Foreign currency demand draft or cash issuance from domestic resident account under for LRS purpose.
  • International transactions on debit or credit cards, transactions on foreign merchant sites, and transactions with dynamic currency conversion (DCC)
  • UPI International transactions
  • Transfers from domestic resident customers to NRO account under LRS (loan or gift to NRI)

Charges

LRS purpose or type of transactionPrior to April 01, 2025Applicable tax (TCS)
LRS for education financed by a LoanNil up to Rs. 7 Lakh, 0.5% above Rs. 7 LakhNo TCS applicable
LRS for Medical Treatment/Education (Other than financed by a Loan)Nil up to Rs. 7 Lakh, 5% above Rs. 7 LakhNil up to Rs. 10 Lakh, 5% above Rs.10 Lakh
LRS for other purposesNil up to Rs. 7 Lakh, 20% above Rs. 7 LakhNill up to Rs. 10 Lakh, 20% above Rs.10Lakh
  • Important Note: Please ensure the account is sufficiently funded to cover the remittance amount, TCS amount, remittance charges, correspondent bank charges and other taxes/charges as applicable. In case of insufficient balances, transactions shall not be processed.