5% TCS to be applicable on FOREX transactions (LRS) w.e.f 1st October, 2020

Practical Example of TCS on foreign remittance through Liberalised Remittance Scheme (LRS)

Mr. Ambani has done remittance during FY 2020-21 as follows:

-1st remittance – Rs. 6,50,000/-

-2nd Remittance – Rs 2,00,000/-

-3rd Remittance – Rs 50,000/-

TCS applicability transaction wise is as under:

>1st remittance – Rs. 6,50,000/- then No Tax will be collected since the amount is below Rs 7,00,000

>2nd Remittance – Rs 2,00,000/- , Yes TCS will be applicable on Rs 1,50,000/-

[(Rs 6,50,000 + Rs 2,00,000) = Rs 8,50,000 – Rs 7,00,000 = Rs 1,50,000]

>3rd Remittance – Rs 50,000 TCS will be applicable on Rs 50,000 entirely since Rs 7,00,000 limit has been exceeded in 2nd transaction.

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