Quick Answer: TCS (Tax Collected at Source) is collected by the seller at the point of sale for specified goods and transactions. Key TCS rates: motor vehicles above ₹10 lakh — 1%; foreign remittance under LRS above ₹7 lakh — 20% (5% for education/medical with documents); foreign tour packages — 5% (20% without PAN); sale of goods above ₹50 lakh by seller — 0.1%.
TCS on Foreign Remittance — October 2023 Rates
RBI's Liberalised Remittance Scheme (LRS) allows Indian residents to remit up to $250,000 per financial year abroad for permissible purposes. From October 2023, banks must collect TCS at revised rates on most outward remittances.
LRS TCS Rate Chart (from Oct 1, 2023)
| Purpose | TCS Rate | Threshold |
|---|---|---|
| Education abroad (via educational loan) | 0% | — |
| Education abroad (own funds) | 5% | Above ₹7 lakh |
| Medical treatment abroad | 5% | Above ₹7 lakh |
| Overseas tour package | 5% | From first rupee |
| Other LRS (investment, gift, travel) | 20% | Above ₹7 lakh |
Frequently Asked Questions
Yes. TCS is advance tax — it is not a final tax. If your TCS collected exceeds your total income tax liability after filing ITR, the excess is refunded by the Income Tax Department to your bank account.
The ₹7 lakh threshold is per financial year, across all LRS remittances for a given purpose. For example, if you remit ₹10 lakh for investment, TCS is 20% on ₹3 lakh (the amount above ₹7 lakh). Note: for overseas tour packages, TCS applies from the first rupee without any threshold.