Complete Guide to TCS when Remitting Foreign Travel Expenses from India
Complete guide to TCS applicable when remitting from India to cover foreign travel such as for overseas tour packages. We go over the TCS rate and how to claim.
Resident and non-resident Indians are traveling and working around the world now more than ever. In an effort to regulate the movement of Indian rupees out of India, the Reserve Bank of India (RBI) first introduced the Liberalised Remittance Scheme (LRS) in 2004.
Since then, it has gone through different iterations to adapt to how modern Indians are moving their money and to manage capital controls. Let’s take a look at what exactly is the Liberalised Remittance Scheme and how, and if, it may affect you in 2019.
If you are moving money out of India, with real exchange rates and low fees, there is no better time than now to try Wise. |
---|
The RBI’s Liberalised Remittance Scheme (LRS) allows Authorized Dealers, which are mostly Indian banks, to allow resident Indian individuals to send up to $250,000 USD outside of India every fiscal year (April-March) for specific purposes¹.
It is available for Indian residents with a PAN card, including minors with the appropriate documentation. The LRS is primarily for sending money outside of India for:²
LRS also lets you remit your net salary in India after taxes, up to $250,000 USD. To start the process, you would have to designate a bank branch for your remittances. This would have to be a bank that falls under RBI’s Authorized Dealer designation. Then you will need to complete the required forms and documentation for LRS.
The LRS is only available to resident individuals with a PAN card. Corporates, partnership firms, HUF, trusts, or any non-individual entity don’t qualify under LRS³.
LRS is also not available for any of the following types of transactions⁴: |
---|
|
You can send money as frequently as you like within a financial year. But the total amount of foreign exchange purchased from or remitted through all the sources in India during that year should be within the total limit of $250,000 USD.
You can remit a maximum of $250,000 USD. Not a penny more. If you have hit the $250,000 USD limit, you are not eligible to make any further remittances under this scheme for the remainder of the year. This holds even if you have brought back proceeds or investments into the country from the money you sent⁵.
While the limits are designated in USD, the remittance can be made in any freely convertible foreign currency offered through your Authorized Dealer, but the converted amount can not exceed $250,000 USD⁶.
Yes, a Permanent Account Number, or PAN, is mandatory for any and all transactions made under the LRS⁷.
Whether it is your niece going off to college in London, or paying rent on your holiday home, Wise can help make your international payments cheap and easy. You can move money on the go, from your phone through the Wise website or app, and deposit it directly into a local bank accounts abroad.
You will always get the real mid-market exchange rate and a clear upfront fee on every transaction. So there are no surprises when the money arrives on the other end. Join the over 5 million people around the world who trust Wise for simple, transparent and low-cost transfers around the world.
Thank you.
Sources used for this article
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
Complete guide to TCS applicable when remitting from India to cover foreign travel such as for overseas tour packages. We go over the TCS rate and how to claim.
Complete guide to TCS and remitting for foreign education expenses from India. Our guide covers the applicable rates, how to claim TCS, and tips to avoid them.
Sending money abroad from India? Check out our guide to TCS charged on foreign remittances, with an overview of rates and how to claim it back with your ITR.
Complete guide and overview of fees about Profee, a compelling service for those seeking fast and often cost-effective international card-to-card transfers.
Our guide to EzyRemit worldwide money transfers provides and overview of their fees, how it works, and what you need to know before using it.
Overview of DBS India Remit service that provides remittances to India for DBS account holders in Singapore with a How-to Guide and expected costs.