Definition
TCS on LRS Remittance
TCS on LRS is tax collected at source on money sent abroad under the Liberalised Remittance Scheme, such as for foreign travel, investment or education.
Under the Liberalised Remittance Scheme (LRS), resident individuals can remit money abroad up to an annual limit for permitted purposes. To track such outflows, banks and authorised dealers collect TCS on these remittances above a threshold, with different rates for purposes like education, medical treatment and other spending such as travel or overseas investment.
The collected TCS is not an extra tax but a prepayment — it can be claimed as a credit against the remitter's income-tax liability or refunded. Travellers and investors should factor in this upfront cash outflow when planning foreign spending or overseas portfolio purchases.
Related terms
- DTAA (Double Taxation Avoidance)A Double Taxation Avoidance Agreement is a treaty between two countries that prevents the same income from being taxed twice and allocates taxing rights between them.
- TDS Section 194 VariantsThe Section 194 family of provisions requires tax to be deducted at source on various payments such as contractor fees, commission, rent, professional fees and dividends.
- Faceless AssessmentFaceless assessment is a system in which income-tax scrutiny and assessment are conducted electronically without physical interface between the taxpayer and a specific officer.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.