20% TCS on forex txns under LRS: Gvt’s concerns FAQs

Synopsis The Ministry of Finance has actually provided Frequently Asked Questions relating to Tax Collection at Source (TCS) on foreign remittance through the Liberalised Remittance Scheme (LRS). The ministry launched the FAQs on May 18, 2023. Read hereGetty ImagesBudget 2023 increased the TCS for foreign remittances under the LRS from 5 percent to 20 percent, other than for education and medical purposes.The Ministry of Finance has actually released Frequently Asked Questions concerning Tax Collection at Source (TCS) on foreign remittance through the Liberalised Remittance Scheme (LRS). The ministry launched the FAQs on May 18, 2023. This followed the financing ministry modified guidelines under the Foreign Exchange Management Act (FEMA) to bring global charge card costs under the LRS. On May 16, 2023, the Ministry of Finance released an alert discussing to leave out guideline 7 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000. They will enter force on the date of their publication in the Official Gazette, according to the notice. Check out: Credit card forex payments under LRS: You have to pay 20% TCS on these deals from July 1, 2023 Budget 2023 increased the TCS for foreign remittances under the LRS from 5 per cent to 20 per cent, other than for education and medical functions. Here is a take a look at the FAQs on TCS on foreign remittance through LRS launched by the financing ministry Why is TCS needed to be gathered? Area 206C of the Income-Tax Act 1961 attends to TCS in business of trading in alcohol, alcohol, forest fruit and vegetables, scrap etc. Sub-section (1G) of the aforementioned area attends to TCS on foreign remittance through the Liberalised Remittance Scheme and on the sale of abroad trip plans. Is TCS relevant to all remittances made abroad? No. Just such remittances which are covered under LRS are accountable to TCS. These have actually been detailed in the response to Q (5) in Part B of the information. What is the factor behind the boost in rates of TCS? The factors for the modification are: – The payment of TCS is not a last tax – If the TCS payee is a taxpayer, he can declare credit for the TCS as his tax payment versus routine earnings and change it versus the advance tax etc., payments appropriately. – If the TCS is of an individual not b
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