In Budget, 2023 the finance minister has changed the Liberalised remittance scheme by increasing the TCS rates from 5% to 20% for remittance under LRS and for the purchase of overseas tour packages.
The following points are to be considered:-
Under the revised provisions, the threshold of 7,00,000 shall be applicable for all categories of LRS payments. This means no TCS will be applicable to LRS transactions upto 7,00,000 but beyond that-
a) 0.5% (for remittances for education financed by a loan from a financial institution
b) 5% (for remittances for education or medical treatment) c) 20% (for all other purposes)
c) 20% (for all other purposes)
Previously, they have notified that the new rates will be effective from July 1st,2023 but to address procedural difficulties it has been postponed to October 1st, 2023 so the earlier rates will continue to apply until September 30, 2023.