Finance Ministry has decided to extend the deadline for implementation of TCS i.e. Tax Collection at Source by three months. Now the new rule of TCS will be implemented from 1 October 2023 instead of 1 July 2023.
However, while living in the country and paying abroad with International Credit Card and this payment is more than Rs 7 lakh in a financial year, then 20 percent TCS will have to be paid on it. On Wednesday, new rules related to TCS were issued by the ministry.
Let us tell you that while presenting the Budget 2023, Finance Minister Nirmala Sitharaman had announced to increase the rate of TCS on foreign remittances. At present, only 5% TCS is deducted on foreign remittances under LRS. It has been increased to 20 percent. However, there is an exemption in some cases. The increased rate of tax was to be implemented from July 1, 2023. At present, it has been extended for 3 months and it has been announced to implement it from 1 October.
What is Liberalized Remittance Scheme (LRS)?
The full form of LRS is Liberalized Remittance Scheme. Actually, the word remittance in English language means sending money outside a country. Crores of NRIs live abroad and send huge amount of money every year to their family and relatives. This amount comes to the country in the form of remittance. Similarly, a large number of people from our country also send foreign currency outside the country. This amount also comes under the category of remittance. Every country has some or the other control on taking foreign currency out of its country.
When was the scheme implemented?
LRS started on February 4, 2004. At that time only 25 thousand dollars were allowed to be taken abroad under this. After this, keeping in view the condition of the country’s economy at different times, the limit for remittance of foreign currency under LRS has been increased or decreased. It is necessary to have a PAN number to send money out under this scheme.
