LRS TCS Tax Computation
Select remittance purpose and enter your planned transfer amount in Indian Rupees (INR).
The 3 Components of LRS Remittance Cost
When executing an international wire transfer from India, your total cash outflow combines foreign exchange pricing, bank wire charges, and statutory tax withholding:
Flat outbound TT wire fee charged by authorized dealer banks (typically ₹500 to ₹1,500 + GST).
The margin added by your bank above the wholesale interbank rate (typically 0.8% to 2.0%).
Tax Collected at Source (0%, 0.5%, 5%, or 20%) remitted to Income Tax Dept under your PAN.
Tax Compliance & Regulatory Benchmark
Official tax and exchange control parameters governing foreign capital remittances:
| Remittance Purpose | Threshold Limit | TCS Rate up to ₹7 Lakhs | TCS Rate above ₹7 Lakhs | PAN Mandate |
|---|---|---|---|---|
| Education (Loan from Financial Inst.) | ₹7,00,000 per FY | NIL (0%) | 0.5% | Mandatory (20% if No PAN) |
| Education (Self-Funded / Savings) | ₹7,00,000 per FY | NIL (0%) | 5.0% | Mandatory (20% if No PAN) |
| Medical Treatment Abroad | ₹7,00,000 per FY | NIL (0%) | 5.0% | Mandatory (20% if No PAN) |
| Overseas Tour Program Package | No Exemption Threshold | 5.0% | 20.0% | Mandatory |
| Investments, Real Estate, Gifts, Others | ₹7,00,000 per FY | NIL (0%) | 20.0% | Mandatory (20% if No PAN) |
LRS TCS Rate Matrix under Section 206C(1G)
The Finance Act established clear tax brackets for outward remittances under the Liberalised Remittance Scheme: (1) Education funded by an education loan from an approved financial institution: 0.5% on amounts exceeding ₹7 Lakhs; (2) Self-funded Education or Overseas Medical Treatment: 5% on amounts exceeding ₹7 Lakhs; (3) Overseas Tour Packages: 5% on amounts up to ₹7 Lakhs, and 20% on amounts exceeding ₹7 Lakhs; (4) Any other purpose (Foreign Stocks, Real Estate, Family Maintenance, Gifts): 20% on amounts exceeding ₹7 Lakhs.
How the ₹7 Lakh Cumulative Exemption Operates
The ₹7,00,000 threshold applies on a cumulative basis across all remittances made in a single financial year (April 1 to March 31). If you remit ₹4 Lakhs via HDFC Bank in May and ₹5 Lakhs via ICICI Bank in August, the second bank will verify your PAN history and apply TCS on the ₹2 Lakh excess above ₹7 Lakhs.
Reclaiming TCS in Your Annual Income Tax Return (ITR)
TCS is not an additional final tax burden or expense. When your bank collects TCS, it deposits the tax directly with the Income Tax Department linked to your PAN. The credit reflects in your Form 26AS and AIS (Annual Information Statement). When filing your ITR, you can adjust the full TCS amount against your total income tax liability or receive a direct bank refund with interest.
Step-by-Step Guide: How to Claim TCS Refund in Your ITR
Because TCS collected under Section 206C(1G) is an advance withholding tax rather than a final non-refundable fee, remitter taxpayers can reclaim or adjust the entire amount during annual tax assessment:
- Collect Bank TCS Certificate (Form 27D): Within 15 days after the end of the fiscal quarter in which remittance occurred, your remitting bank issues Form 27D certifying the exact TCS collected and deposited under your PAN.
- Verify Form 26AS & Annual Information Statement (AIS): Log in to the Income Tax e-Filing portal (incometax.gov.in) and verify that the TCS credit appears under Schedule TCS in Form 26AS and AIS under the correct tax year.
- Offset Against Advance Tax or Self-Assessment Tax: If you owe income tax on domestic salary, capital gains, or business income, deduct the entire TCS amount from your total tax liability, reducing your direct cash tax outflow.
- Claim Direct Bank Refund with Interest: If your total tax liability is less than the TCS deducted (e.g. for students or dependents with zero taxable income), filing your ITR generates a direct electronic refund into your pre-validated bank account with 0.5% monthly interest under Section 244A.
- Adjust Employer TDS via Form 12BB: Salaried employees can declare TCS collected on overseas remittances to their HR payroll department via Form 12BB, enabling employers to lower monthly salary TDS deductions.