Below is the TCS charging grid for remittances and transactions under LRS –

LRS Purpose/Type of transaction	Applicable Tax (TCS)
1. Travel A. Business travel B. Travel for pilgrimage C. Travel for medical treatment D. Travel for education (including fees, hostel expenses etc. E.Other travel (including holiday trips and payments for settling international credit cards transactions) 2. Debit Card A. International transactions on Debit Cards (including transactions done on Foreign Merchants)	5% of the transaction / remittance amount from INR 1
LRS Purpose - Studies abroad, where the source of funds is Education loan	0.5% of the remittance amount above INR 7 lacs during the financial year.
Other LRS purposes	5% of the remittance amount, above INR 7 lacs during the financial year.

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 will not be processed.

Illustrations

TCS Illustration 1

TCS Illustration 2

TCS Illustration 3

Sharing a few illustrations for your reference :

The aggregate amount of remittance made by customer during the financial year is INR 500,000. Whether TCS applicable to this customer?
No, since the aggregate amount of remittance made during the financial year is less than INR 700,000, TCS is not applicable to this customer.
The aggregate amount of remittance made by customer during the financial year is INR 1,000,000. Whether TCS applicable to this customer?
Yes, since the aggregate amount of remittance made during the financial year is more than INR 700,000, TCS is applicable to this customer. In such case TCS will be applicable @5% on INR 300,000 (on amount exceeding INR 700,000).
The aggregate amount of remittance made by customer upto 30 September 2020 is INR 500,000 and from 1 October 2020 to 31 March 2021 is INR 500,000. Whether TCS applicable to this customer?
Yes, since the aggregate amount of remittance made during the financial year is more than INR 700,000, TCS is applicable to this customer. In such case TCS will be applicable @5% on INR 300,000 (on amount exceeding INR 700,000).
The aggregate amount of remittance made by customer upto 30 September 2020 is INR 1,000,000 and from 1 October 2020 to 31 March 2021 is INR 500,000. Whether TCS applicable to this customer?
Yes, since the aggregate amount of remittance made during the financial year is more than INR 700,000, TCS is applicable to this customer. However, in this case threshold limit is already exceeded prior to 1 October 2020, therefore, the TCS would apply @5% on every amount remitted after 1 October 2020 i.e. on INR 500,000.
Customer Mr. A has made remittance of USD 6,500 towards Overseas Tour Package to M/S. Thomas Cook, USA. Whether TCS applicable to this customer?
Yes TCS @5% would apply in this case even if the amount of remittance is INR 481,000 (USD 6,500*INR 74), as there is no threshold amount on remittances towards ‘Overseas Tour Package’.
Customer Mr. A has made remittance of USD 20,000 towards education fees out of India out of his loan borrowed from Scheduled Bank (qualified loan under Indian Income Tax Act). Is TCS applicable to this customer and at what rate?
Yes. In this case, since the amount of remittance is INR 14,80,000 (USD 20,000*INR 74) and made toward pursuing education out of India out of loan qualified under the Indian Income Tax Act, TCS @0.5% would apply on the amount exceeding INR 700,000.
Customer, the US embassy in India, has made remittance of USD 20,000 for official purpose to USA. Is TCS applicable to this customer?
No. TCS is applicable on remittances made by an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State etc.

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