TCS on Overseas Remittances (LRS & Foreign Tours) under Section 206C(1G): Slabs, Exemptions & Refund Recovery

Published: January 28, 20255 min readEffective: Applicable across all foreign forex remittances

View Official Gazette / Govt Source Consult Senior Partner

Executive Regulatory Summary

Detailed guidelines on Tax Collected at Source (TCS) on foreign remittances through the Liberalised Remittance Scheme (LRS) and purchase of overseas tour packages. Analysis of the 20% TCS rate, ₹7 Lakh exemption threshold, education/medical concessions, and adjusting TCS against advance tax.

Key Statutory Takeaways

Zero TCS on LRS remittances for education and medical purposes up to ₹7 Lakh; 5% TCS thereafter.
Purchase of overseas tour program packages attracts 5% TCS up to ₹7 Lakh, and 20% TCS on amounts beyond ₹7 Lakh.
General remittances (investments, gifts) attract 20% TCS on amounts exceeding ₹7 Lakh per financial year.
TCS collected is fully creditable against final tax liability and refundable in annual ITR.

Actionable Compliance Checklist for Businesses

Step-by-step advisory measures prescribed by ASGR and CO for immediate adherence:

1Maintain a consolidated tracker of all overseas remittances made across different Authorized Dealer (AD) banks in the financial year.

2Provide written declaration of cumulative remittances to the remitting bank to ensure correct bracket application.

3Download Form 27D certificate from the TRACES portal to confirm TCS credit in Form 26AS.

4Adjust TCS credits against quarterly advance tax obligations to protect business cash flow.

1. Multi-Tiered TCS Structure under Section 206C(1G)

To monitor foreign currency outflows, Section 206C(1G) imposes substantial upfront collection obligations on authorized dealers. The 20% rate on foreign travel and investments necessitates active tax planning so that assessees do not experience prolonged capital lock-in pending return refunds.

Target Entities Governed by this Notification:

Outbound Indian Travelers & FamiliesParents Funding Overseas Higher EducationHNIs Investing in Global Stocks & Real EstateTravel Operators & Authorized Forex Dealers

Advisory Published By

CA Vishal Kanojia

Partner - Audit & Corporate Compliance • B. Com, FCA, Bank Branch Auditor

ASGR and CO, Chartered Accountants (Peer Review Certified: #018Xxx)

Statutory Disclaimer: This publication is compiled by ASGR and CO solely for general informational and educational purposes to assist corporate clients and peers in understanding statutory notifications. It does not constitute legal, tax, or formal secretarial advice. Before acting upon any provisions, specific professional counsel should be sought.

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