{"id":15386,"date":"2023-02-02T12:09:11","date_gmt":"2023-02-02T06:39:11","guid":{"rendered":"https:\/\/blogrevamp.cashfree.com\/?p=15386"},"modified":"2025-08-22T12:08:31","modified_gmt":"2025-08-22T06:38:31","slug":"tcs-on-foreign-remittances-under-lrs","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/","title":{"rendered":"Budget 2023: 20% TCS on Foreign Remittances under LRS"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a8effd7a0529\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #364250;color:#364250\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #364250;color:#364250\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a8effd7a0529\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#What_is_TCS_on_Foreign_Remittances\" >What is TCS on Foreign Remittances?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#Settlement_of_TCS_on_Outward_Remittance_against_Income_Tax\" >Settlement of TCS on Outward Remittance against Income Tax<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#Increase_in_TCS_on_Remittance_%E2%80%93_Impact_on_Individuals\" >Increase in TCS on Remittance &#8211; Impact on Individuals<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#1_Impact_on_Capital_Account_Transactions\" >1. Impact on Capital Account Transactions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#2_International_Trips_and_Foreign_Tours\" >2. International Trips and Foreign Tours<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#3_Impact_on_Current_Account_Transactions_for_Other_Purposes\" >3. Impact on Current Account Transactions for Other Purposes<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#How_do_ADs_collect_TCS_on_Outward_remittances_under_LRS\" >How do ADs collect TCS on Outward remittances under LRS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/#How_can_Cashfree_Payments_Help_as_a_Payment_Gateway_for_LRS\" >How can Cashfree Payments Help as a Payment Gateway for LRS?<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"wp-block-paragraph\">February 2023 commenced with Finance Minister Nirmala Sitharaman presenting the Union Budget for Financial Year 2023-24. Everyone was glued to the screens anticipating how the new budget unfolds!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the expectations from the budget for 2023 got many hits and misses, there is some news for Indian investors and residents who send money abroad!<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>The Union Budget FY 2023-24 proposes <\/em><strong><em>20% TCS (Tax Collection at Source)<\/em><\/strong><em> on <\/em><strong><em>outward remittances <\/em><\/strong><em>under<\/em><strong><em> LRS (Liberalised Remittance Scheme)<\/em><\/strong><em>.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">LRS, a <em>2004 scheme by the RBI<\/em>, allows individual residents of India to send money up to <strong>USD 2,50,000<\/strong> to any foreign country in a financial year. Previously, the <strong>foreign remittance of INR 7<\/strong> <strong>Lakh <\/strong>was <strong>tax-exempt<\/strong> and a <strong>TCS of 5%<\/strong> was applicable on the exceeding amount.<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">However, per the new Budget, a <em>TCS of 20% will be applicable on all foreign remittances under LRS<\/em> barring those for <strong>educational <\/strong>and <strong>medical <\/strong>purposes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Undoubtedly, the <strong>LRS has simplified cross-border payments<\/strong> where it is easy to remit money to a foreign nation. But, the increased tax rate has become a cause of concern for citizens sending money abroad.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s understand in detail how the proposed rate of <strong>TCS on remittances under LRS<\/strong> will impact citizens!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-tcs-on-foreign-remittances\"><span class=\"ez-toc-section\" id=\"What_is_TCS_on_Foreign_Remittances\"><\/span><strong>What is TCS on Foreign Remittances?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>TCS aka Tax Collection at Source<\/strong> is an Income tax which is collected by the seller of specified goods from the buyer. The seller is liable to collect tax from a buyer at a prescribed rate and deposit the same to the Government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Section 206C of the Income Tax Act, 1961<\/strong> mentions a list of such specific items. Money remitted under LRS is also charged with TCS (foreign remittance tax).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the <a href=\"https:\/\/www.cashfree.com\/blog\/liberalised-remittance-scheme\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=TCS-on-foreign-remittances-under-LRS\" target=\"_blank\" rel=\"noreferrer noopener\">Liberalised Remittance Scheme (LRS)<\/a>, Indian residents can remit money via <strong>authorised dealers (ADs)<\/strong> such as banks or financial institutions listed by RBI. They can send a maximum of USD 2,50,000 in a single financial year (April to March).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is valid under any permissible current or capital account transaction and even the combination of both.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Moreover, remittances up to INR 7 Lakh were exempted from TCS. Above and over this amount, a TCS of 5% was levied on the outward remittances.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The budget this financial year <em>removed this capping of tax-free remittance<\/em>. Moreover, it <em>hiked up the <\/em><strong><em>5% TCS to 20%<\/em><\/strong>. There is an exception for money remitted for <em>educational and medical expenses<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s a table that gives a clearer picture of the new changes in the tax charges-<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" fetchpriority=\"high\" decoding=\"async\" width=\"770\" height=\"441\" data-attachment-id=\"15388\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/tcs-on-foreign-remittances-under-lrs\/remittance-table\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?fit=1200%2C687&amp;ssl=1\" data-orig-size=\"1200,687\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Remittance-Table\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?fit=770%2C441&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?resize=770%2C441&#038;ssl=1\" alt=\"TCS on LRS\" class=\"wp-image-15388\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?resize=1024%2C586&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?resize=300%2C172&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?resize=768%2C440&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?resize=900%2C515&amp;ssl=1 900w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2023\/02\/Remittance-Table.jpg?w=1200&amp;ssl=1 1200w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><figcaption class=\"wp-element-caption\">TCS on LRS Transactions &#8211; New Changes (Union Budget 2023-24)<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, if an Indian resident sends Rs. 10 Lakh (not for educational or medical purposes), the TCS will be Rs. 2 Lakh. As a result, the sender will have to give Rs. 12 Lakh.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-settlement-of-tcs-on-outward-remittance-against-income-tax\"><span class=\"ez-toc-section\" id=\"Settlement_of_TCS_on_Outward_Remittance_against_Income_Tax\"><\/span><strong>Settlement of TCS on Outward Remittance against Income Tax<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Another guideline is that <strong>TCS on outward remittances under LRS can be settled against Income Tax.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">TCS like Income Tax is <strong>linked with PAN<\/strong> and the paid TCS amount will appear on <em>Form 26AS<\/em>. TCS is the tax that an individual has already paid and hence, it can be adjusted against tax dues and refunds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>So, how will it work? Let us explain!<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, a sender paid Rs. 2 Lakh as TCS on LRS. Now, while filing an Income Tax Return (ITR), s\/he has a tax liability of Rs. 3 Lakh. Then, s\/he can adjust the TCS against the tax dues and pay only Rs. 1 Lakh as Income Tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Alternatively, if the sender has to pay a tax of Rs. 1 Lakh and the TCS paid for an <a href=\"https:\/\/www.cashfree.com\/blog\/outward-remittance-meaning\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=TCS-on-foreign-remittances-under-LRS\" target=\"_blank\" rel=\"noreferrer noopener\">outward remittance<\/a> is Rs. 2 Lakh, then s\/he can claim a refund of Rs. 1 Lakh.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-increase-in-tcs-on-remittance-impact-on-individuals\"><span class=\"ez-toc-section\" id=\"Increase_in_TCS_on_Remittance_%E2%80%93_Impact_on_Individuals\"><\/span>Increase in TCS on Remittance &#8211; Impact on Individuals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Corporates, partnership firms, charitable trusts or HUFs (Hindu Undivided Families) CANNOT send money under LRS. Only an individual who is an Indian citizen can send money to any country under Liberalised Remittance Scheme.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other than travel, education and medical expenses, individuals can also invest in stocks, debt instruments, mutual funds or make other investments in overseas markets. They can even lend loans to relatives settled abroad or buy immovable properties.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the<em> increased tax rates, that is, TCS on LRS may become a restraint against outward foreign cash flow<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s how-<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Impact_on_Capital_Account_Transactions\"><\/span>1. <strong>Impact on Capital Account Transactions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">As the term \u2018capital transactions\u2019 indicates, this type of remittance by Indian residents is to make capital investments in a foreign country.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Indian youth brought about a <a href=\"https:\/\/timesofindia.indiatimes.com\/blogs\/voices\/were-alright-indias-youth-drive-a-surge-in-the-stock-market\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">surge in the stock market<\/a>. Millennials and GenZ became the driving force of equity investments. With LRS, one could presume that their participation in foreign investments and overseas markets was bound to rise.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>But, will they be willing to invest in foreign markets after 20% TCS on foreign remittances under LRS?<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well, that is uncertain!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After all, if an individual <em>wants to invest INR 5 Lakh in a foreign market<\/em>, <em>with 20% TCS<\/em>, s\/he has to pay an <em>additional INR 1 Lakh as tax<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>LRS capital transactions<\/strong> allow Indian investors to-<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Open &amp; maintain Foreign Currency Accounts<\/li>\n\n\n\n<li>Purchase property<\/li>\n\n\n\n<li>Acquire overseas equities, investing in venture capital funds and make several foreign investments<\/li>\n\n\n\n<li>Set up WOS (Wholly Owned Subsidiary) or JV (Joint Venture)<\/li>\n\n\n\n<li>Loans to NRI relatives in INR under the <a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Companies Act, 2013<\/a><\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_International_Trips_and_Foreign_Tours\"><\/span><strong>2. International Trips and Foreign Tours<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Many Indians who took international trips and foreign tours, be it for leisure, personal visits or business purposes will have to think twice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is because the <em>cost of travel will get expensive<\/em> with the increased TCS on LRS of 20%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Generally, <a href=\"https:\/\/www.news18.com\/news\/lifestyle\/travel-are-millennial-travellers-the-reason-behind-the-boost-in-the-travel-industry-find-out-6343897.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">generation Y (millennials) and Z are integrating travel into their lifestyle<\/a>. They are tech-savvy, risk-takers and have higher spending power than their previous generations. Flashpacking, workation and adventure trips have almost become a norm for young India.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They like to travel not just for pleasure but gain different experiences and perspectives and hence, <a href=\"https:\/\/economictimes.indiatimes.com\/industry\/services\/travel\/millenial-indians-travel-abroad-more-favour-singapore-us\/articleshow\/50015550.cms?from=mdr\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">save up money to explore new destinations<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>But, with 20% TCS on outward remittances under LRS, an individual will have to pay 3 times more taxes on foreign trips.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, an individual saves up to INR 3 Lakh for an international tour. With 20% TCS on foreign remittances, they have to save INR 60,000 additionally.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In contrast to the new tax regime of LRS, previously the TCS was 5%. Therefore, the individual could have paid INR 15,000 as tax for LRS.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Impact_on_Current_Account_Transactions_for_Other_Purposes\"><\/span>3. <strong>Impact on Current Account Transactions for Other Purposes<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Under LRS, outward remittances are of two types. One is the capital account transactions that we discussed above and the other is current account transactions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Expenses on abroad trips also come under current account transactions. Other than that, remittances for medical treatments and educational fees are also counted under this category.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although <strong>medical <\/strong>and <strong>educational <\/strong>expenses will have the <strong>same taxation as before of 5%<\/strong>, all <strong>other current account transactions<\/strong> will have <strong>20% TCS<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Foreign remittances for medical and educational purposes will also have the <\/em><strong><em>benefit <\/em><\/strong><em>of <\/em><strong><em>no TCS<\/em><\/strong><em> up to a <\/em><strong><em>limit of INR 7 Lakhs<\/em><\/strong><em> as before.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, if someone wanted to lend money to a friend settled abroad or attend a foreign concert will have to take note of the total costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>For every cross-border payment worth INR 10,000, an individual will pay INR 2,000 as tax which was INR 500 before<\/em><\/strong><em>.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Apart from these, current account remittances under LRS include &#8211;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sending gifts or money to foreign friends and family members<\/li>\n\n\n\n<li>Donations to charities that operate abroad<\/li>\n\n\n\n<li>Sending money for employment purposes<\/li>\n\n\n\n<li>Sending money when shifting abroad<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-do-ads-collect-tcs-on-outward-remittances-under-lrs\"><span class=\"ez-toc-section\" id=\"How_do_ADs_collect_TCS_on_Outward_remittances_under_LRS\"><\/span>How do ADs collect TCS on Outward remittances under LRS?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">As mentioned earlier, the RBI mandates that <strong>residents can do LRS transactions only with the ADs<\/strong>, that is, the authorised dealers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The authorised dealers are the banks and financial institutions permitted by the RBI to carry out LRS remittances. However, the RBI now encourages <a href=\"https:\/\/www.cashfree.com\/blog\/cashfree-liberalising-cross-border-payments\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=TCS-on-foreign-remittances-under-LRS\" target=\"_blank\" rel=\"noreferrer noopener\">fintechs to partner with these regulated entities to promote seamless cross-border transactions<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The sender must <strong>share the PAN details <\/strong>which are necessary for <strong>all kinds of outward remittances<\/strong>, be they current or capital transactions. The AD banks calculate taxes on the amount the remitter is remitting and deposit them with the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The following process is how the ADs collect TCS in India under the LRS scheme:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Calculation of TCS:<\/strong> The authorized bank calculates the TCS amount by applying the appropriate TCS rate defined by the government for the specified purpose of remittance<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Deduction of TCS<\/strong>: The AD bank deducts the calculated TCS amount from the total remittance amount and retains it in their accounts<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Deposit with Government:<\/strong> The AD bank then deposits the collected TCS amount with the government through appropriate tax channels<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>TCS Return Filing:<\/strong> The AD bank is then responsible for filing a TCS return with the Indian tax authorities to report the TCS collected. <em>The return should include details such as the TCS amount, PAN number of the remitter, and other relevant information<\/em><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>TCS Certificate: <\/strong>The bank provides the remitter with a TCS certificate, which serves as proof of TCS payment and can be used for tax purposes<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-can-cashfree-payments-help-as-a-payment-gateway-for-lrs\"><span class=\"ez-toc-section\" id=\"How_can_Cashfree_Payments_Help_as_a_Payment_Gateway_for_LRS\"><\/span>How can Cashfree Payments Help as a Payment Gateway for LRS?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.cashfree.com\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=TCS-on-foreign-remittances-under-LRS\" target=\"_blank\" rel=\"noreferrer noopener\">Cashfree Payments<\/a>, as a Payment Gateway, can help streamline the entire process of payments and TCS collection for the purpose of outward remittance. Here\u2019s how Cashfree Payments is better than a traditional authorised dealer bank,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Convenient and Paperless:<\/strong> Cashfree Payments provides a single platform for collecting payments and remitting TCS. It is completely paperless and more convenient than working with multiple authorised dealer banks.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, a sender can <strong>send LRS money and TCS from their own bank accounts<\/strong> through Cashfree Payments. Whereas, for remittances via AD banks, the sender needs <em>to open a savings account<\/em>.<em> <\/em>This is because the sender can process remittances only with banks that already have their accounts.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Processing Speed:<\/strong> Via Cashfree Payments LRS remittance solutions, TCS can be checked instantly based on the remitter\u2019s PAN number with the AD banks. TCS can be collected through PG together with the remittance transaction with no requirement of a separate manual process.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">We aim for <strong>same-day remittance<\/strong> <strong>settlements <\/strong>and clear all <strong>LRS remittance compliance<\/strong> requirements in the meantime.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Moreover, we have <strong>multiple modes of payments<\/strong> via <em>38+ banks<\/em> and <em>industry-first UPI payments<\/em>. The remitter can also make an <em>offline bank transfer through RTGS\/NEFT<\/em>.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fully Digitalised Flow<\/strong> &#8211; Cashfree Payments offer a fully digitalised flow to<em> facilitate LRS remittance as a Payment Aggregator and TSP to AD banks<\/em>.<\/li>\n\n\n\n<li><strong>Infrastructure<\/strong>: The powerful infrastructure of Cashfree Payments <strong>automates <\/strong>the calculation, collection and remittance of TCS, reducing the chances of errors and increasing efficiency.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">We provide <strong>real-time TCS calculation<\/strong> before the remittance. We also have smart FX-rate calculations to fulfil complete payment after the currency conversion.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, if a remitter wants a seamless, completely digital and convenient way to send money across borders, we have <a href=\"https:\/\/www.cashfree.com\/international-payments\/outward-remittance\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=TCS-on-foreign-remittances-under-LRS\" target=\"_blank\" rel=\"noreferrer noopener\">LRS payment solutions in compliance with the RBI guidelines<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To know more, reach out to our <a href=\"https:\/\/www.cashfree.com\/contact-sales\/?source-action=Outward%20remittance&amp;action=Contact%20Sales&amp;button-id=ContactSales_Hero\">Team<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>February 2023 commenced with Finance Minister Nirmala Sitharaman presenting the Union Budget for Financial Year 2023-24. Everyone was glued to the screens anticipating how the new budget unfolds! While the expectations from the budget for 2023 got many hits and misses, there is some news for Indian investors and residents who send money abroad! The<\/p>\n","protected":false},"author":62,"featured_media":15392,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[9490],"tags":[],"class_list":["post-15386","post","type-post","status-publish","format-standard","has-post-thumbnail","category-cross-border-commerce-payments"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Budget 2023: 20% TCS on Foreign Remittances under LRS<\/title>\n<meta name=\"description\" content=\"TCS on LRS transactions hiked up! Budget 2023-24 proposes to increase 5% TCS on outward remittances under LRS to 20%. Get details here!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cashfree.com\/blog\/tcs-on-foreign-remittances-under-lrs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Budget 2023: 20% TCS on Foreign Remittances under LRS\" \/>\n<meta property=\"og:description\" content=\"TCS on LRS transactions hiked up! Budget 2023-24 proposes to increase 5% TCS on outward remittances under LRS to 20%. 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Budget 2023-24 proposes to increase 5% TCS on outward remittances under LRS to 20%. Get details here!\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Yashi Das\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Budget 2023: 20% TCS on Foreign Remittances under LRS","description":"TCS on LRS transactions hiked up! Budget 2023-24 proposes to increase 5% TCS on outward remittances under LRS to 20%. 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