Comparative table showing the changes in TCS on outward remittance under LRS, effective April 1, 2025, compared to the old provisions (effective from October 1, 2023 – March 31, 2025):
TCS on Outward Remittance Under LRS – Old vs. New Provisions
| Category | Old Provision (1 Oct 2023 – 31 Mar 2025) | New Provision (Effective 1 Apr 2025) | Key Changes |
|---|---|---|---|
| TCS Threshold (Exemption Limit) | ₹7 lakh per financial year | ₹10 lakh per financial year | ✅ Threshold increased by ₹3 lakh, reducing tax burden on smaller remittances. |
| Education (Funded by Loan from a Financial Institution) | Up to ₹7 lakh: No TCS Above ₹7 lakh: 0.5% on the excess amount | Up to ₹10 lakh: No TCS Above ₹10 lakh: 0.5% on the excess amount | ✅ Threshold raised, but TCS rate remains unchanged at 0.5% for excess. |
| Education (Self-Funded or Non-Qualifying Loan) | Up to ₹7 lakh: No TCS Above ₹7 lakh: 5% on the excess amount | Up to ₹10 lakh: No TCS Above ₹10 lakh: 5% on the excess amount | ✅ Threshold increased by ₹3 lakh; TCS rate remains the same. |
| Medical Treatment | Up to ₹7 lakh: No TCS Above ₹7 lakh: 5% on the excess amount | Up to ₹10 lakh: No TCS Above ₹10 lakh: 5% on the excess amount | ✅ Threshold increased by ₹3 lakh; TCS rate remains the same. |
| Overseas Tour Packages | No threshold exemption 5% TCS on all amounts up to ₹7 lakh 20% TCS on amount exceeding ₹7 lakh | Up to ₹10 lakh: 5% TCS Above ₹10 lakh: 20% TCS (Possibly on full amount, subject to clarification) | ✅ Threshold increased but 20% TCS applicability on entire amount above ₹10 lakh needs confirmation. |
| Other Purposes (Investments, Gifts, Travel, etc.) | Up to ₹7 lakh: No TCS Above ₹7 lakh: 20% on excess amount | Up to ₹10 lakh: No TCS Above ₹10 lakh: 20% on excess amount | ✅ Threshold increased by ₹3 lakh; TCS rate unchanged. |
| International Credit Card Payments (Overseas) | Exempted from LRS (as per Finance Ministry clarification in June 2023) | No change (but subject to future policy updates) | 🔍 Clarification may be needed for long-term applicability. |
| Business Remittances (Non-LRS) | Not applicable under LRS | No change | 🚫 TCS does not apply to business transactions (handled separately under TDS rules). |
Key Takeaways:
- Higher Exemption Limit (₹10 lakh) → Less immediate tax burden for remitters.
- Education & Medical Remittances → Still 5% TCS above the new threshold, but loans from financial institutions get a reduced 0.5% rate.
- Other General Remittances → 20% TCS on amounts exceeding ₹10 lakh, same as before.
- Overseas Tour Packages → 5% TCS up to ₹10 lakh, but above ₹10 lakh, 20% may apply on the entire amount (subject to clarification).
- International Credit Card Transactions Exempted (for now).
Also Read:
- Recommendations of the 55th Meeting of the GST Council
- Changes in GST and Income Tax during the Financial Year 2024-25
- TDS and TCS provisions applicable from April 1, 2025
- Rationalizing TDS: A Deep Dive into Budget 2025’s Proposals
Go To Memorandum
Go To Finance Bill 2025
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CA Cult YouTube:
1. TCS Credit of minor in the hands of Parent | Clubbing | Union Budget 2024
2. Calculation of Income Tax FY 2024-25 | Old vs New Regime | For Salaried Employees
Also Read: New Income-tax Bill 2025 Navigator
