New TCS Rules: From October 1, new TCS rules will be applicable on foreign travel, treatment abroad, investment in foreign shares and mutual funds. However, TCS rules will be applicable only on expenditure above a certain limit.
New Delhi. If you are going for a holiday or studying abroad, then there is good news for you. Actually, the new rates of Tax Collection at Source (TCS) under the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India (RBI) will be applicable from October 1, 2023. If you understand in simple language, new TCS rules will be applicable on foreign travel, investment in foreign shares and mutual funds from October 1. However, TCS rules will be applicable only on expenditure above a certain limit.
New TCS rates on foreign remittances for education
No TCS will be charged on foreign remittances up to Rs 7 lakh spent on education under LRS. If you take an educational loan from an authorized financial institution for foreign study and send an amount of more than Rs 7 lakh in a financial year, then TCS of 0.5 percent will have to be paid on it. If you send more than Rs 7 lakh for foreign study without loan, then 5 percent TCS will be charged on it. Apart from this, the amount spent on travel for foreign study will also be taxed at the same rate.
Revised TCS rates for medical expenses:
According to the new TCS rules, from next month, if you send an amount of more than Rs 7 lakh abroad for treatment in a financial year, then 5 percent TCS will be levied on it. Also, any travel expenses related to treatment abroad will also be taxed at the same rate from October 1, 2023.
TCS rates for foreign tour packages
From October 1, 2023, if you buy a foreign tour package worth more than Rs 7 lakh in a financial year, you will have to pay 20 percent TCS. If the price of your tour package is less than Rs 7 lakh in a financial year, then you will have to pay 5 percent TCS on it.
TCS rates for foreign investment:
If you invest more than Rs 7 lakh abroad from October 1, 2023, you will have to pay 20 percent TCS on it. This means that if you spend more than Rs 7 lakh in a financial year on buying foreign shares, mutual funds, and cryptocurrencies, you will have to pay 20 percent TCS. However, if you have invested in Indian mutual funds that deal in foreign investments, then no TCS will be charged on it.
TCS rates on credit card expenditure:
Payment made through credit card does not come under the purview of LRS. Therefore, TCS will not be levied on expenses incurred through credit cards. If the expenditure is more than Rs 7 lakh, then 20 percent TCS will have to be paid on debit and forex card transactions from October 1, 2023.
