Emails that are not meant for me: Revised limits for Tax Collected at Source (TCS) on remittances under the Liberalised Remittance Scheme from April 01, 2025

Monday, 28 April 2025

Revised limits for Tax Collected at Source (TCS) on remittances under the Liberalised Remittance Scheme from April 01, 2025

Threshold limit for Tax Collected at Source (TCS) increased to ₹10 lakh

Dear Saurabh Kumar,

As per the Union Budget 2025 issued by the Ministry of Finance (MOF) following are the changes in the Tax Collected at Source (TCS) on remittances under the Liberalised Remittance Scheme (LRS) of the RBI:

•	The threshold to collect TCS on remittances under the RBI’s Liberalised Remittance Scheme increased from ₹7 lakh to ₹10 lakh.

•	TCS is not applicable on remittances for education purpose, wherein the source of funds is Education Loan from specific financial institutions.

Please note that the changes will be applicable from Apr 01, 2025:

Sr. No.	Nature of payment	Prior to Apr 01, 2025	Revision w.e.f. Apr 01, 2025
1	LRS for education financed by a Loan	Nil up to ₹7 lakh 0.5% - above ₹7 lakh	No TCS applicable
2	LRS for Medical Treatment/ Education (Other than financed by a Loan)	Nil up to ₹7 lakh 5% - above ₹7 lakh	Nil up to ₹10 lakh 5% - above ₹10 lakh
3	LRS for other purposes	Nil up to ₹7 lakh 20% - above ₹7 lakh	Nil up to ₹10 lakh 20% - above ₹10 lakh

Note:

1.	TCS will not be applicable for the LRS transaction wherein the source of funds is Education Loan but the Education Loan amount will be considered while calculating the threshold for applicability of TCS on other LRS remittances.

2.	There will be no TCS on expenditures under LRS under sub section (1G) of Section 206C of the Income Tax Act, 1961 for the first ₹10 lakh, irrespective of the purpose.

3.	In accordance with the Section 139AA of the Act, Rule 114AAA of the Income Tax Rules 1962, it is mandatory to link PAN with Aadhaar. If PAN is not linked with Aadhaar, the PAN will become inoperative and TCS will be charged at the rate applicable in accordance with the Section 206CC of the Act.