Remittance / Purchase Details
Standard TCS rates applied.
TCS to Collect
₹0
Total Payable
₹0
TCS Calculation Analysis
Applicable TCS Rate
Threshold
₹7,00,000
TCS Threshold Status
Calculation based on standard LRS rules.
Common TCS Rate Card (2026)
Latest rates applicable for resident individuals and businesses.
| Type of Payment | Standard Rate | Threshold |
|---|---|---|
| LRS (Education/Medical) | 5% | ₹7 Lakhs |
| LRS (Others) | 20% | ₹7 Lakhs |
| Overseas Tour Program | 5% / 20% | ₹7 Lakhs |
| Luxury Motor Vehicle | 1% | ₹10 Lakhs |
| Sale of Goods (u/s 206C(1H)) | 0.1% | ₹50 Lakhs |
TCS Calculation Methodology
1. Threshold Limit: Most LRS transactions have a ₹7 Lakh combined annual exemption.
2. Marginal Calculation: TCS is only applied to the amount *exceeding* the threshold.
3. PAN Importance: If PAN is not provided, Section 206CC mandates a higher rate (usually 20%).
What is TCS under LRS?
Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) is a tax mechanism used by the RBI and Income Tax Department to track foreign outward remittances by resident individuals. The primary purpose is to monitor large-value transactions and ensure they match the taxpayer's reported income.
Starting October 2023, the exemption threshold is ₹7 Lakhs per financial year. This limit applies to all remittances combined (except for overseas tour packages which have their own rules). If you send more than ₹7 Lakhs, your bank will collect TCS, which you can later claim while filing your Income Tax Return.
Latest TCS Rates (2026)
The Union Budget 2026 maintained the increased rates for foreign spending to encourage domestic investment. Here is the summary of current rates:
- Overseas Education: 0.5% (if funded by loan) or 5% (if self-funded) above ₹7 Lakhs.
- Medical Treatment: 5% above the ₹7 Lakhs threshold.
- Investment/Gift/Maintenance: A high rate of 20% applies on the amount exceeding ₹7 Lakhs.
- Overseas Tour Packages: 5% up to ₹7 Lakhs and 20% for any amount above that.
Planning a big purchase? Check your Capital Gains Tax before redeeming assets for foreign transfers.
How to Claim TCS Refund?
TCS is not an additional cost but a form of prepaid tax. You can claim the entire amount back if your final tax liability is zero, or adjust it against your payable tax. For detailed calculations, use our TDS vs TCS comparison tool.
- Check Form 26AS: Ensure the TCS collected by your bank or dealer reflects in your Annual Information Statement (AIS).
- File ITR: Mention the TCS amount in the 'Tax Paid' section of your Income Tax Return.
- Adjust or Refund: The department will adjust it against your tax on salary/business or refund it to your bank account if you've overpaid.
Manage your quarterly obligations accurately with our Advance Tax Calculator.
Understanding TCS Rules in India (2026)
Tax Collected at Source (TCS) is a tax payable by a seller which he collects from the buyer at the time of sale. In recent years, the Indian government has significantly expanded the scope of Section 206C to include foreign remittances under the Liberalised Remittance Scheme (LRS).
The logic behind TCS on foreign spending is to track high-value transactions. For a traveler or an investor, TCS is not an "extra tax" but an advance tax payment. The amount deducted can be claimed as a credit while filing your ITR. Plan your long-term wealth correctly using our XIRR tool to see actual post-tax returns.
Recent Changes in LRS TCS Rates
As of the latest regulations, the rates for LRS have seen a major hike. While education and medical remittances still enjoy a lower rate (5% above ₹7L), other purposes like investing in foreign stocks or sending money to relatives attract a steep **20% TCS**. This makes cash flow planning essential for global Indian families. Consider starting a SIP early to buffer against these costs.