{"id":9208,"date":"2020-10-08T13:19:56","date_gmt":"2020-10-08T07:49:56","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=9208"},"modified":"2026-02-15T12:24:25","modified_gmt":"2026-02-15T06:54:25","slug":"overview-tcs-on-liberalized-remittance-scheme","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/","title":{"rendered":"Overview TCS on Liberalized Remittance scheme"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ffffe7efcec\" 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: #000000;color:#000000\" 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: #000000;color:#000000\" 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-69ffffe7efcec\"  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:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Key_Takeaways_About_the_TCS_On_Liberalized_Remittance_scheme_LSR_Applicability\" title=\"Key Takeaways About the\u00a0 TCS On Liberalized Remittance scheme (LSR) Applicability\">Key Takeaways About the\u00a0 TCS On Liberalized Remittance scheme (LSR) Applicability<\/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:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Benefits_of_Liberalized_Remittance_scheme\" title=\"Benefits of Liberalized Remittance scheme\">Benefits of Liberalized Remittance scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Liberalized_Remittance_Scheme_Eligibility_Requirements\" title=\"Liberalized Remittance Scheme Eligibility Requirements\">Liberalized Remittance Scheme Eligibility Requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Liberalized_Remittance_scheme_Annual_Remittance_Limit\" title=\"Liberalized Remittance scheme Annual Remittance Limit\">Liberalized Remittance scheme Annual Remittance Limit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Prohibited_Transactions_under_Liberalized_Remittance_scheme\" title=\"Prohibited Transactions under Liberalized Remittance scheme\">Prohibited Transactions under Liberalized Remittance scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Activities_that_are_prohibited_in_compliance_with_rule_3_of_the_foreign_exchange_management_act_1999\" title=\"Activities that are prohibited in compliance with rule 3 of the foreign exchange management act, 1999:\">Activities that are prohibited in compliance with rule 3 of the foreign exchange management act, 1999:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Activities_that_require_prior_approval_by_the_central_government_see_Schedule_II_Rule_4\" title=\"Activities that require prior approval by the central government (see Schedule II Rule 4)\">Activities that require prior approval by the central government (see Schedule II Rule 4)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Prohibition_on_the_drawing_of_foreign_exchange\" title=\"Prohibition on the drawing of foreign exchange :\u00a0\">Prohibition on the drawing of foreign exchange :\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Permitted_transactions_of_the_capital_account\" title=\"Permitted transactions of the capital account: \">Permitted transactions of the capital account: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#TCS_on_an_Amount_for_remittances_transactions_under_LRS_Scheme\" title=\"TCS on an Amount for remittances transactions under LRS Scheme.\">TCS on an Amount for remittances transactions under LRS Scheme.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Tax_collection_at_source_charging_grid_for_Liberalized_Remittance_Scheme_remittances_and_transactions\" title=\"Tax collection at source charging grid for Liberalized Remittance Scheme remittances and transactions\u00a0\">Tax collection at source charging grid for Liberalized Remittance Scheme remittances and transactions\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#In_summary\" title=\"In summary\u00a0\">In summary\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Liberalised_Remittance_Scheme_%E2%80%93_Updated_Overview_Budget_2025_2026\" title=\"Liberalised Remittance Scheme \u2013 Updated Overview (Budget 2025 &amp; 2026)\">Liberalised Remittance Scheme \u2013 Updated Overview (Budget 2025 &amp; 2026)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#_Budget_2025_Update_%E2%80%93_Higher_TCS-Free_Threshold\" title=\"\u00a0Budget 2025 Update \u2013 Higher TCS-Free Threshold\">\u00a0Budget 2025 Update \u2013 Higher TCS-Free Threshold<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Budget_2026_Update_%E2%80%93_Major_TCS_Reductions\" title=\"Budget 2026 Update \u2013 Major TCS Reductions\">Budget 2026 Update \u2013 Major TCS Reductions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Liberalized_Remittance_Scheme_Applicability_for_NRIs\" title=\"Liberalized Remittance Scheme Applicability for NRIs\">Liberalized Remittance Scheme Applicability for NRIs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#NRI_Remittance_Rules\" title=\"NRI Remittance Rules\">NRI Remittance Rules<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Latest_Overview_on_RBI_Guidelines_for_Outward_Remittance\" title=\"Latest Overview on\u00a0RBI Guidelines for Outward Remittance\">Latest Overview on\u00a0RBI Guidelines for Outward Remittance<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#1_Select_an_Authorised_Dealer_AD_Bank\" title=\"1. Select an Authorised Dealer (AD) Bank\">1. Select an Authorised Dealer (AD) Bank<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#2_Carry_Your_PAN_Card\" title=\"2. Carry Your PAN Card\">2. Carry Your PAN Card<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#3_Complete_KYC_AML_Compliance\" title=\"3. Complete KYC &amp; AML Compliance\">3. Complete KYC &amp; AML Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#5_Fill_and_Submit_Form_A2\" title=\"5. Fill and Submit Form A2\">5. Fill and Submit Form A2<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#6_No_Credit_Facility_Allowed_for_Liberalized_Remittance_Scheme_Transfers\" title=\"6. No Credit Facility Allowed for Liberalized Remittance Scheme Transfers\">6. No Credit Facility Allowed for Liberalized Remittance Scheme Transfers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Frequently_Asked_on_TCS_on_Liberalized_Remittance_Scheme\" title=\"Frequently Asked on TCS on Liberalized Remittance Scheme.\">Frequently Asked on TCS on Liberalized Remittance Scheme.<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_1_what_is_the_effective_date_of_introduction_of_the_tax_implications\" title=\"Questions: 1. what is the effective date of introduction of the tax implications?\">Questions: 1. what is the effective date of introduction of the tax implications?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Question_2_What_all_transactions_will_be_affected_by_this_Tax_collected_at_source_requirement\" title=\"Question:2. What all transactions will be affected by this Tax collected at source requirement?\">Question:2. What all transactions will be affected by this Tax collected at source requirement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_3_Can_GST_be_applied_to_the_5_TCS_collected\" title=\"Questions: 3. Can GST be applied to the 5% TCS collected?\">Questions: 3. Can GST be applied to the 5% TCS collected?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_4_what_are_the_various_reasons_for_which_the_tax_collection_applies\" title=\"Questions: 4. what are the various reasons for which the tax collection applies?\">Questions: 4. what are the various reasons for which the tax collection applies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_5_what_are_the_various_Purpose_permitted_under_Liberalized_Remittance_Scheme\" title=\"Questions: 5. what are the various Purpose permitted under Liberalized Remittance Scheme?\">Questions: 5. what are the various Purpose permitted under Liberalized Remittance Scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_6_what_are_the_various_permissible_capital_account_transactions_by_an_individual_for_purposes_permitted_under_Liberalized_Remittance_Scheme\" title=\"Questions: 6. what are the various permissible capital account transactions by an individual for purposes permitted under Liberalized Remittance Scheme?\">Questions: 6. what are the various permissible capital account transactions by an individual for purposes permitted under Liberalized Remittance Scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/carajput.com\/blog\/overview-tcs-on-liberalized-remittance-scheme\/#Questions_7_Whats_Dynamic_Currency_Conversion_DCC\" title=\"Questions: 7. What\u2019s Dynamic Currency Conversion (DCC)?\">Questions: 7. What\u2019s Dynamic Currency Conversion (DCC)?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><a style=\"font-size: 16px;\" href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/lrs.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9209\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/lrs.jpg\" alt=\"www.carajput.com; LRS\" width=\"967\" height=\"506\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/lrs.jpg 310w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/lrs-300x157.jpg 300w\" sizes=\"(max-width: 967px) 100vw, 967px\" \/><\/a><\/h1>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways_About_the_TCS_On_Liberalized_Remittance_scheme_LSR_Applicability\"><\/span><span style=\"color: #ff0000;\"><strong>Key Takeaways About the\u00a0 TCS On Liberalized Remittance scheme (LSR) Applicability<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #333399;\"><strong>Concept of Liberalized Remittance scheme as per Reserve Bank of India Regulation :<\/strong><\/span><\/p>\n<ul>\n<li>AD&#8217;s Liberalized Remittance\/ Transfer Scheme may openly allow Remittance\/ Transfer s of up to USD 2,50,000 (April-March) per Financial Year to resident individuals for any approved current or capital account transaction or a combination of both.<\/li>\n<li>The Liberalized Remittance\/ Transfer Scheme is not applicable to corporations, partnership businesses, <a href=\"https:\/\/carajput.com\/blog\/tag\/hindu-undivided-family-huf\/\">HUFs<\/a>, trusts, etc.<\/li>\n<li>Remittance\/ Transfer s under the Scheme may be accumulated in respect of members of the family required to comply with its terms and conditions by individual members of the family.<\/li>\n<li>Fortunately, for capital account activities such as opening a bank account\/investment\/purchase of property, clubbing is not allowed by other family members if They are not the co-owners \/ co-partners in foreign bank accounts\/<a href=\"https:\/\/carajput.com\/blog\/know-about-foreign-direct-investment-in-india\/\">investmen<\/a>t\/property.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Benefits_of_Liberalized_Remittance_scheme\"><\/span><span style=\"color: #000080;\"><strong>Benefits of <span style=\"color: #333399;\">Liberalized Remittance scheme<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The <span style=\"color: #333399;\">Liberalized Remittance scheme<\/span>\u00a0framework gives Indian residents the freedom to<\/p>\n<ul>\n<li>Pay for international education, medical care, and other personal expenses.<\/li>\n<li>Make global investments for diversification.<\/li>\n<li>Transfer funds abroad for family maintenance.<\/li>\n<li>Repay foreign loans or meet other financial obligations overseas.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Liberalized_Remittance_Scheme_Eligibility_Requirements\"><\/span><span style=\"color: #000080;\"><strong>Liberalized Remittance Scheme Eligibility Requirements<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div>\n<p><span style=\"color: #000080;\"><strong><span style=\"color: #333399;\">Liberalized Remittance scheme<\/span><\/strong><\/span> is available to Resident individuals, including minors and students. A valid PAN, Indian bank account, and passport are mandatory. Transactions can be for Education, Travel, Maintenance of relatives, Investments (shares, mutual funds, property abroad), Medical treatment and Business or personal purposes.<\/p>\n<\/div>\n<div>\n<h3><span class=\"ez-toc-section\" id=\"Liberalized_Remittance_scheme_Annual_Remittance_Limit\"><\/span><span style=\"color: #000080;\"><strong>Liberalized Remittance scheme Annual Remittance Limit<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under\u00a0<span style=\"color: #000080;\"><strong><span style=\"color: #333399;\">Liberalized Remittance scheme<\/span><\/strong><\/span>, a resident individual may remit up to USD 250,000 per financial year. This covers Education, Medical treatment, Travel, Gifts, Employment\/emigration, Overseas investments (equity, debt, real estate) and Maintenance of relatives<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Prohibited_Transactions_under_Liberalized_Remittance_scheme\"><\/span><span style=\"color: #000080;\"><em>Prohibited Transactions under <strong>Liberalized Remittance scheme<\/strong><\/em><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Remittances <strong>cannot<\/strong> be used for Margin trading, Lottery winnings, Banned\/illegal activities, Purchase of real estate abroad on behalf of someone else and Trading in foreign exchange abroad<\/p>\n<\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/images.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9224\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/images.png\" alt=\"www.carajput.com; RBI guidelines\" width=\"933\" height=\"372\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/images.png 356w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/images-300x120.png 300w\" sizes=\"(max-width: 933px) 100vw, 933px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Activities_that_are_prohibited_in_compliance_with_rule_3_of_the_foreign_exchange_management_act_1999\"><\/span><span style=\"color: #333399;\"><strong>Activities that are prohibited in compliance with rule 3 of the <a href=\"https:\/\/carajput.com\/fema.php\">foreign exchange management act, 1999:<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>In case of Remittance\/ Transfer from winnings of lotteries.<\/li>\n<li>If Remittance\/ Transfer of revenue or some other pleasure from racing\/riding etc.<\/li>\n<li>Transfer \/ Remittance for lottery ticket purchases prohibited\/proscribed magazines, football games, sweepstakes, etc.<\/li>\n<li>Payment of the export commission for equity investment in joint ventures \/ wholly owned subsidiaries of Indian companies abroad.<\/li>\n<li>Remittance\/ Transfer of dividends from any company to whom a dividend balancing provision applies.<\/li>\n<li>In case Payment of commissions for exports under the Rupee State Credit Route, with the exception of commissions of up to 10% of the invoice value of tea and tobacco exports.<\/li>\n<li>In case Payment for telephones connected to &#8216;Call Back Systems.&#8217;<\/li>\n<li>Remittance\/ Transfer of interest income on funds deposited in the Non-Resident Special Rupee (Account) \u00a0Scheme.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Activities_that_require_prior_approval_by_the_central_government_see_Schedule_II_Rule_4\"><\/span><span style=\"color: #333399;\"><strong>Activities that require prior approval by the central government (see Schedule II Rule 4)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Cultural trips<\/li>\n<li>Advertisement in global print media by the State Government and its Public Sector Undertakings for objectives other than development of tourism, foreign investment, and international bidding (exceeding USD 10,000)<\/li>\n<li>Transfer \/ Remittance of freight chartered by a PSU vessel<\/li>\n<li>Import payment by Govt. Department or PSU on the basis of c.i.f. (i.e. not based on f.o.b. and f.a.s.)<\/li>\n<li>Multi-modal transport operators that transfer Remittance\/ Transfer s to their agents In abroad<\/li>\n<li>Remittance\/ Transfer of transponder hiring\u00a0charges by (a) TV networks (b) Internet Service Providers<\/li>\n<li>In case Remittance\/ Transfer of charges for the detention of containers in excess of the rate stated by the Director-General of Shipping<\/li>\n<li>Technical partnership deal Remittance\/ Transfer s where royalty payments exceed 5% on local revenues and 8% on exports and lumpsum payments exceed USD 2 million<\/li>\n<li>If Remittance\/ Transfer for P &amp; I Club membership<\/li>\n<li>Once Remittance\/ Transfer by a person of prize money\/sponsorship for sports activities in abroad other than International \/ National \/ State Level sports bodies of prize money\/sponsorship of sports operation overseas, if the sum concerned reaches USD 100,000.<\/li>\n<\/ol>\n<p>More read \u00a0for related blogs are: <strong><a href=\"https:\/\/carajput.com\/blog\/new-revise-tds-tcs-return-filing-due-date-payment-due-date\/\">New revised TDS\/TCS due date for filing Return and Payment for the year 2020<\/a><\/strong><\/p>\n<ul>\n<li>Moreover, a resident cannot give a foreign currency as a gift to another resident for the credit of a foreign currency account kept abroad by the latter under the Liberalized Remittance Scheme.<\/li>\n<li>The scheme should not be used to make remittances\/transfers for any prohibited or immoral activities such as margin lending, lotteries, etc.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Prohibition_on_the_drawing_of_foreign_exchange\"><\/span><span style=\"color: #333399;\"><strong>Prohibition on the drawing of foreign exchange<\/strong> :\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Prohibition on the drawing of foreign exchange by any person for the following purposes:<\/p>\n<ol>\n<li>The transaction specified in Schedule I;<\/li>\n<li>Travel to Bhutan and\/or Nepal;<\/li>\n<li>The transaction with a person who is resident in Nepal or Bhutan.<\/li>\n<\/ol>\n<p><span style=\"color: #333399;\"><strong>Such that the prohibition referred to in clause (c) may be excluded by the <a href=\"https:\/\/carajput.com\/rbi-consulting.php\">Reserve Bank of India <\/a>, pursuant to such terms and conditions as may be considered appropriate by special or general order.<\/strong><\/span><\/p>\n<ul>\n<li>All such transactions not otherwise permitted under The Foreign Exchange Management Act\u00a0and those of a margin or margin call Remittance\/ Transfer form to overseas exchanges \/ overseas counterparties are not permitted under the Liberalized Remittance\/ Transfer scheme.<\/li>\n<li>Allowable Current account transactions: The cap of USD 2.50,000 per Financial Year (FY) under the Scheme also contains\/subsumes Remittance\/ Transfer s for current account transactions (i.e. private visits; gifts\/donations; work from abroad; emigration; preservation of close relatives abroad; business trips; medical care in abroad; studies abroad) available to the resident individual in India foreign exchange not more than USD 250,000 by getting prior approval from RBI.<\/li>\n<li>Private visits<\/li>\n<li>Gift \/ donation<\/li>\n<li>Moving abroad\u00a0for jobs\/employment<\/li>\n<li>Emigration<\/li>\n<li>Maintenance of\u00a0\u00a0close relatives in Abroad<\/li>\n<li>Business trip<\/li>\n<li>Medical care in abroad<\/li>\n<li>Resources for students to complete their studies abroad.<\/li>\n<\/ul>\n<p>Also Read <strong><a href=\"https:\/\/carajput.com\/learn\/key-features-of-tcs-on-goods-sale-section-206c-1h-applicable-from-1-october-2020.html\">key features of TCS on goods sale section-206c<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Permitted_transactions_of_the_capital_account\"><\/span><span style=\"color: #333399;\"><strong>Permitted transactions of the capital account: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #333399;\"><strong>The permitted transactions of the capital account by an individual under the Liberalized Remittance Scheme are<\/strong><\/span><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/PermissibleCapitalAccountTransactions.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-9223\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/PermissibleCapitalAccountTransactions.jpg\" alt=\"www.carajput.com; Permissible capital Account\" width=\"960\" height=\"720\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/PermissibleCapitalAccountTransactions.jpg 960w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/PermissibleCapitalAccountTransactions-300x225.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/PermissibleCapitalAccountTransactions-768x576.jpg 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/a><\/p>\n<ul>\n<li>New Opening a bank account for foreign currency account abroad.<\/li>\n<li><strong>Investment in\u00a0abroad:<\/strong> purchase and retention of stock in both listed and unlisted foreign companies or debt instruments; purchase in qualified stock of a foreign company for hold\u00a0the position of director; purchase of stocks of a foreign company for professional services rendered or in exchange of remuneration of the Director; investment in Mutual Funds units; Venture Capital Funds; promissory note, unrated debt securities;<\/li>\n<li>Setting up of Wholly Owned Subsidiaries and Joint Ventures (w.e.f. 5<sup>th<\/sup> Aug 2013) for the bonafide industry outside India, according to the Reserve Bank of India terms and conditions.<\/li>\n<li>Extending loans to non-resident Indians (NRIs) who are relatives, including loans in Indian Rupees as specified in the Companies Act, 2013<\/li>\n<li>To encourage capital account Remittance\/ Transfer s under the <strong>Liberalized Remittance Scheme<\/strong>, banks do not provide any kind of credit facilities to resident individuals.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"TCS_on_an_Amount_for_remittances_transactions_under_LRS_Scheme\"><\/span><span style=\"color: #000080;\"><strong><a href=\"https:\/\/carajput.com\/tds.php\">TCS<\/a> on an Amount for remittances transactions under LRS Scheme.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>TCS on a sum for remittance transactions under Liberalized Remittance Scheme.:<\/p>\n<p>According to the amendment pursuant to section 206C of the Finance Act 2020, an approved dealer who collects a sum for remittances under the Liberalized Remittance Scheme shall be liable for TCS transactions under the Liberalized Remittance Scheme.<\/p>\n<ul>\n<li>tax collection at source will be effective 1 October 2020 for all Liberalized Remittance Scheme transactions, including international debit card transactions.<\/li>\n<li>Underpayments are within the limits of the tax collection at source applicability-<\/li>\n<li>Liberalized Remittance Scheme forwarding transactions via the Bank branch or bank Online.<\/li>\n<li>Foreign Currency Demand Draft or cash issuance from a domestic resident account for the purpose of the Liberalized Remittance Scheme.<\/li>\n<li>International transactions on Debit Card Transactions (including transactions on international traders or platforms providing Dynamic Currency Conversion-DCC Transactions)<\/li>\n<li>Transfers from domestic resident customers to Liberalized Remittance Scheme NGO account (Loan to NRI or Gift to NRI)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Tax_collection_at_source_charging_grid_for_Liberalized_Remittance_Scheme_remittances_and_transactions\"><\/span><span style=\"color: #000080;\"><strong><span style=\"color: #000080;\">Tax collection at source charging grid for Liberalized Remittance Scheme remittances and transactions<\/span>\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/LRS.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9222\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/LRS.png\" alt=\"www.carajput.com; LRS\" width=\"932\" height=\"783\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/LRS.png 700w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/LRS-300x252.png 300w\" sizes=\"(max-width: 932px) 100vw, 932px\" \/><\/a><\/p>\n<table width=\"886\">\n<tbody>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Liberalized Remittance Scheme Purpose\/Type of transaction<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Applicable of Tax collected at source<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"508\"><strong>1. Remittances under Liberalized Remittance Scheme Purpose S0306 \u2013<br \/>\n<\/strong>2. International transactions on Debit Cards (including Dynamic Currency Conversion\u00a0&#8211; DCC transactions) and<br \/>\n3. Other travel including holiday trips and payments for settling international credit card transactions.<\/td>\n<td width=\"378\"><strong>5%<\/strong> of the transaction\/remittance amount<\/td>\n<\/tr>\n<tr>\n<td><strong>Liberalized Remittance Scheme Purpose S1107 Studies abroad and S0305\u00a0Travel for education, where the source of funds is Education loan<\/strong><\/td>\n<td><strong>0.5%<\/strong>\u00a0of the remittance amount above INR 7 lacs during the financial year.<\/td>\n<\/tr>\n<tr>\n<td><strong>Any Other Liberalized Remittance Scheme purposes<\/strong><\/td>\n<td><strong>5%<\/strong>\u00a0of the remittance amount, above INR 7 lacs during the financial year.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Note:- It is to ensure that the account is properly financed to cover the cost of the remittance, the Tax collected at source cost, the remittance charges, the related bank fees as well as other taxes\/charges as applicable. In the case of insufficient balances, payments will not be processed.<\/p>\n<p>Changes have been made to the Source Tax Collection (TCS) provision for international remittances made during the Union Budget 2020-21. Please find below the list of the amended provision;<\/p>\n<ul>\n<li>The TCS clause will now be effective from 1 October 2020 instead of 1 April 2020.<\/li>\n<li>On the basis of the recent clarification, TCS shall refer to sums greater than INR 7 lakh in the financial year and not to the total sum.<\/li>\n<li>In situations where the sum is charged for continuing education through a loan from any financial institution, the rate of TCS shall be 0.5 percent above the sum of INR 7 lakh.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"In_summary\"><\/span><span style=\"color: #000080;\"><strong>In summary\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-23601\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate-.jpg\" alt=\"TCS Rate\" width=\"1163\" height=\"668\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate-.jpg 1163w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate--300x172.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate--1024x588.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate--768x441.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/TCS-Rate--800x460.jpg 800w\" sizes=\"(max-width: 1163px) 100vw, 1163px\" \/><\/p>\n<ul>\n<li>Residents can easily enter into a transaction of up to USD 2,50,000 under the Reserve Bank of India&#8217;s Liberalized Remittance Scheme for a financial year from April 1 to March 31.<\/li>\n<li>According to the Foreign Exchange Management Act, a resident individual can engage in current and capital account transactions, or a combination of both, as prescribed by the Reserve Bank of India.<\/li>\n<li>Foreign exchange transactions of up to Rs. 7,00,000 in a financial year will be tax-free as of October 1, 2020. In the hands of a person, any amount above Rs. 7,00,000 is subject to TCS at a rate of 5% and 0.5 percent in the case of an education loan transaction.<\/li>\n<li>Individuals can file an Income Tax return to receive a tax refund or to reduce the amount of tax collected against their overall tax due. There is no minimum threshold for collecting Taxes on tour packages.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Liberalised_Remittance_Scheme_%E2%80%93_Updated_Overview_Budget_2025_2026\"><\/span><span style=\"color: #000080;\"><strong>Liberalised Remittance Scheme \u2013 Updated Overview (Budget 2025 &amp; 2026)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\n<p>The Liberalised Remittance Scheme is an RBI initiative that allows resident Indian individuals to remit up to USD 250,000 per financial year for various permitted current and capital account transactions. These include education, travel, medical treatment, gifts, maintenance of relatives, and overseas investments. \u00a0Key Updates: Budget 2025 &amp; Budget 2026<\/p>\n<h3><span class=\"ez-toc-section\" id=\"_Budget_2025_Update_%E2%80%93_Higher_TCS-Free_Threshold\"><\/span><span style=\"color: #000080;\"><strong>\u00a0Budget 2025 Update \u2013 Higher TCS-Free Threshold<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The TCS exemption limit on foreign remittances under <strong>Liberalized Remittance Scheme<\/strong>\u00a0has been raised from \u20b97 lakh to \u20b910 lakh per financial year.<\/li>\n<li>No TCS will be levied on <strong>Liberalized Remittance Scheme<\/strong>\u00a0transactions up to \u20b910 lakh.<\/li>\n<li>Education remittances from educational loans (from recognised financial institutions):<br \/>\n0% TCS, irrespective of amount.<\/li>\n<li>For remittances exceeding \u20b910 lakh (except education loan remittances):<br \/>\n5% TCS applies.<\/li>\n<li>The TCS paid can be claimed as refund\/adjustment in ITR, visible in Form 26AS.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Budget_2026_Update_%E2%80%93_Major_TCS_Reductions\"><\/span><span style=\"color: #000080;\"><strong>Budget 2026 Update \u2013 Major TCS Reductions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>Liberalized Remittance Scheme<\/strong>\u00a0for Health &amp; Education &#8211; TCS reduced from 5% \u2192 2%.<\/li>\n<li>Overseas Tour Packages &#8211; TCS reduced from 5% &amp; 20% \u2192 flat 2%, with no minimum threshold.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Liberalized_Remittance_Scheme_Applicability_for_NRIs\"><\/span><span style=\"color: #000080;\"><strong>Liberalized Remittance Scheme Applicability for NRIs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Liberalized Remittance Scheme\u00a0scheme is only for resident Indians. NRIs cannot remit under Liberalized Remittance Scheme\u00a0because they cannot hold resident savings accounts.\u00a0However, they can remit funds abroad outside Liberalized Remittance Scheme, through the following accounts:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"NRI_Remittance_Rules\"><\/span><span style=\"color: #000080;\">NRI Remittance Rules<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"___i31lg00 f10pi13n f14t3ns0 f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1hm93bs f1ddd56o f16vktn6 f1enuhaj fdclmfp f1ev3kgc ftgm304 f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f1s2k7dp f8fmt76 fjvbh62 fysh76l fic4ptz f1yenhzu f1yn6nvh f14tj6oe f1jq587y f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f70r78m f4zgifc fk1v6el f16pyhcb fo436u6 fzy4j18 fc43013 f1hmrcvb fc4t9fq fgp09rh fjnyn6r\">\n<tbody>\n<tr>\n<th>NRI Account<\/th>\n<th>Remittance Limit<\/th>\n<th>Notes<\/th>\n<\/tr>\n<tr>\n<th scope=\"row\">NRO<\/th>\n<td>Up to USD 10,000 per year<\/td>\n<td>For taxable Indian income; repatriation requires documentation (Form 15CA\/CB).<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">NRE<\/th>\n<td>No limit<\/td>\n<td>Fully repatriable funds.<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">FCNR<\/th>\n<td>No limit<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h2><span class=\"ez-toc-section\" id=\"Latest_Overview_on_RBI_Guidelines_for_Outward_Remittance\"><\/span><span style=\"color: #000080;\"><strong style=\"font-size: 16px;\">Latest Overview on\u00a0<\/strong><strong style=\"font-size: 16px;\">RBI Guidelines for Outward Remittance<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\n<p>Outward remittance refers to the transfer of funds from an Indian bank account to a foreign bank account. The Reserve Bank of India regulates all outward remittances under the Foreign Exchange Management Act and the Liberalised Remittance Scheme for resident individuals. Under these guidelines, outward remittances may be made through A bank-issued demand draft in the sender\u2019s or beneficiary\u2019s name, or Transfer through authorised dealer (AD) banks and Maintaining a foreign bank account abroad (permitted under The Foreign Exchange Management Act for specific purposes). <span style=\"color: #000080;\"><strong>As per Reserve Bank of India norms following <\/strong><\/span><span style=\"color: #000080;\"><strong>Steps for Making an Outward Remittance.\u00a0<\/strong><\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Select_an_Authorised_Dealer_AD_Bank\"><\/span><span style=\"color: #000080;\"><strong>1. Select an Authorised Dealer (AD) Bank<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Choose a bank branch that is an authorised dealer in foreign exchange. Only authorised dealer Category-I banks are permitted to process Liberalized Remittance Scheme related outward remittances.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Carry_Your_PAN_Card\"><\/span><span style=\"color: #000080;\"><strong>2. Carry Your PAN Card<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A valid PAN is mandatory to initiate any remittance under Liberalized Remittance Scheme.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Complete_KYC_AML_Compliance\"><\/span><span style=\"color: #000080;\"><strong>3. Complete KYC &amp; AML Compliance<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Banks must follow KYC (Know Your Customer) norms, AML (Anti-Money Laundering) guidelines and CFT (Combating the Financing of Terrorism) checks.\u00a0These verifications are compulsory before processing any foreign exchange transaction.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_Fill_and_Submit_Form_A2\"><\/span><span style=\"color: #000080;\"><strong>5. Fill and Submit Form A2<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Form A2 is required for purchasing foreign exchange or remitting funds abroad.<br \/>\nIt includes Purpose of remittance (as per The Foreign Exchange Management Act purpose codes), Amount of foreign exchange required and Declaration of <strong>Liberalized Remittance Scheme<\/strong>\u00a0compliance.\u00a0Banks cannot process the remittance without this form.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"6_No_Credit_Facility_Allowed_for_Liberalized_Remittance_Scheme_Transfers\"><\/span><span style=\"color: #000080;\"><strong>6. No Credit Facility Allowed for Liberalized Remittance Scheme Transfers<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per Reserve Bank of India regulations Banks are prohibited from extending any credit facilities to residents for making remittances under <strong>Liberalized Remittance Scheme<\/strong>. This means You cannot remit money abroad using overdrafts, loans, or credit lines offered by banks. Only freely available funds in your bank account can be used for outward remittances.<\/p>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"Frequently_Asked_on_TCS_on_Liberalized_Remittance_Scheme\"><\/span><span style=\"color: #000080;\"><strong>Frequently Asked on <a href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-new-section-206ab-section-206cca\/\">TCS<\/a> on Liberalized Remittance Scheme.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-12663\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances.jpg\" alt=\"TCS on Forign remittances\" width=\"1011\" height=\"1010\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances.jpg 1011w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances-300x300.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances-150x150.jpg 150w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances-768x767.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/TCS-on-Forign-remittances-800x799.jpg 800w\" sizes=\"(max-width: 1011px) 100vw, 1011px\" \/><\/a><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Questions_1_what_is_the_effective_date_of_introduction_of_the_tax_implications\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 1. what is the effective date of introduction of the tax implications?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The effectiveness of the Tax collected at the source clause on international remittances is updated from 1 April 2020 to 1 October 2020.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Question_2_What_all_transactions_will_be_affected_by_this_Tax_collected_at_source_requirement\"><\/span><span style=\"color: #000080;\"><strong><em>Question:2. What all transactions will be affected by this Tax collected at source requirement?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>All remittances in excess of INR 7 lakh in the financial year under the <strong>Liberalized Remittance Scheme<\/strong>\u00a0will be liable for 5 percent of TCS, except where the remittance is for education paid out through a loan from any financial institution.<\/li>\n<li>The rate would then be decreased from 5% to 0.5%.<\/li>\n<li>The exclusion from TCS for remittances abroad under <strong>Liberalized Remittance Scheme<\/strong>\u00a0for sums just under INR 7 lakh in the financial year would not apply if the sum is charged for the purchase of the overseas tour program kit.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Questions_3_Can_GST_be_applied_to_the_5_TCS_collected\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 3. Can GST be applied to the 5% TCS collected?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>No GST would refer to the tax collected by the TCS. However, GST will refer to the conversion &amp; remittance service fee of the currency.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Questions_4_what_are_the_various_reasons_for_which_the_tax_collection_applies\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 4. what are the various reasons for which the tax collection applies?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Tax would apply to all remittances from India that come under the Liberalized Remittance Scheme\u00a0 of Reserve Bank of India.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Questions_5_what_are_the_various_Purpose_permitted_under_Liberalized_Remittance_Scheme\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 5. what are the various Purpose permitted under Liberalized Remittance Scheme?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Following are the purposes permitted under <strong>Liberalized Remittance Scheme<\/strong>.<\/p>\n<ul>\n<li>Private visits to any country (excluding Nepal and Bhutan)<\/li>\n<li>Donation or charity;<\/li>\n<li>Study abroad<\/li>\n<li>Moving overseas to work<\/li>\n<li>Emigration:<\/li>\n<li>Maintenance of loyal family members abroad<\/li>\n<li>Travel for business, or attending a conference or advanced training, or meeting expenses for meeting medical expenses, or checking abroad, or accompanying a patient going abroad for medical treatment\/check-up;<\/li>\n<li>Expenditures for medical care overseas<\/li>\n<li>Any other current account transaction not protected in The Foreign Exchange Management Act, 1999.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Questions_6_what_are_the_various_permissible_capital_account_transactions_by_an_individual_for_purposes_permitted_under_Liberalized_Remittance_Scheme\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 6. what are the various permissible capital account transactions by an individual for purposes permitted under Liberalized Remittance Scheme?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Permissible capital account transactions by an individual under Liberalized Remittance Scheme\u00a0are:<\/p>\n<ul>\n<li>Investments abroad \u2013 acquisition and holding of shares in both listed and unlisted foreign companies or debt instruments; 5 acquisition in qualified shares of a foreign company for the role of the director; acquisition of shares of a foreign company for professional services rendered or in lieu of remuneration of the director; investment in units of mutual funds, venture capital funds;<\/li>\n<li>Establishment of wholly-owned subsidiaries and joint ventures (with effect from 05 August 2013) outside India for a bonafide company subject to the terms and conditions set out in Notification No FEMA.263 \/ RB-2013 of 5 March 2013;<\/li>\n<li>to extend loans, namely loans in Indian Rupees, to non-resident Indians (NRIs) who are relatives.<\/li>\n<li>the opening of foreign currency accounts with a bank abroad;<\/li>\n<li>purchase of foreign property;<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Questions_7_Whats_Dynamic_Currency_Conversion_DCC\"><\/span><span style=\"color: #000080;\"><strong><em>Questions: 7. What\u2019s Dynamic Currency Conversion (DCC)?<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Many international traders offer the &#8216;Dynamic Currency Conversion&#8217; facility \u2013 which enables customers to make purchase payments directly in their home currency (i.e. Indian Rupees for cards issued in India).<\/li>\n<li>This service is provided by selected international merchants or websites. The final transaction amount (as determined by the merchant \/ Dynamic Currency Conversion service provider) must be checked by you before the payment is made. Depending on the sum given by the merchant, Citi will charge you the final amount (Indian Rupees).<\/li>\n<li>The conversion procedure, the exchange rate, and any markup applied in such cases shall be decided, as the case may be, by the applicable merchant or Dynamic Currency Conversion service provider.<\/li>\n<li>If we do not opt for Dynamic Currency Conversion, you will be billed in local currency by the merchant. If the local currency is not USD, then the transaction is translated first from the local currency to $ then from $ to INR.<\/li>\n<\/ul>\n<p>Popular blog:-<\/p>\n<ul>\n<li><a href=\"https:\/\/carajput.com\/blog\/basic-document-filing-fc-gpr-form-with-rbi\/\" target=\"_top\" rel=\"noopener\">Basic Document -filing FC-TRS form with RBI<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/archives\/amendments-in-sebi-listing-obligations-and-disclosure-requirements-regulations-2015.pdf\">Amendments in SEBI -Listing Obligations and Disclosure Requirements Regulations 2015<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways About the\u00a0 TCS On Liberalized Remittance scheme (LSR) Applicability Concept of Liberalized Remittance scheme as per Reserve Bank of India Regulation : AD&#8217;s Liberalized Remittance\/ Transfer Scheme may openly allow Remittance\/ Transfer s of up to USD 2,50,000 (April-March) per Financial Year to resident individuals for any approved current or capital account transaction &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[9686,9338,9341,9339,9340],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/9208"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=9208"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/9208\/revisions"}],"predecessor-version":[{"id":31290,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/9208\/revisions\/31290"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=9208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=9208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=9208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}