{"id":16566,"date":"2020-09-18T14:18:04","date_gmt":"2020-09-18T08:48:04","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=16566"},"modified":"2020-09-18T22:58:52","modified_gmt":"2020-09-18T17:28:52","slug":"government-to-levy-5-tcs-on-foreign-remittances","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/government-to-levy-5-tcs-on-foreign-remittances\/","title":{"rendered":"Government to Levy 5% TCS on Foreign Remittances"},"content":{"rendered":"\n

According to the Finance Act 2020<\/em><\/strong>, funds sent overseas under the Reserve Bank of India\u2019s liberalized remittance method are subject to 5% TCS on Foreign Remittances subject to riders.<\/p>\n\n\n\n

The Government has presented some carve-outs so that not every foreign remittance will be a subject to Tax collected at Source. Those who are making Foreign Remittances needs to consider their TCS\u00a0liability from next month, as a key tax provision has kicked in from 1st October 2020. The new provision says that TCS on Foreign Remittances will only be applicable on payments above INR 700,000. However, in case of education-related foreign remittances funded by loans, a TCS of 0.5% will be levied for an amount above INR 7 lakh.<\/p>\n\n\n\n

Read our article<\/b>:Major reforms aimed at Transparent Taxation for \u2018Honoring the Honest\u2019 \u2013 PM Modi launched.<\/a><\/mark><\/p>\n\n\n\n

The opinion of the Legitimate Sources<\/h2>\n\n\n\n

According to the legitimate sources, it says that \u201cThere are data\u2019s that shows many people who have transferred funds abroad under the Foreign Remittance scheme did not file for income tax returns<\/strong><\/a>. Usually people forwarding big amounts should be paying income tax as they are coming under the income tax bracket. So, they have to take this step. And, in opposition to misinterpretation in a specific section of the media, 5% TCS on Foreign Remittance is not an additional or new tax. It is more like a TDS which you can adjust against your total tax liability.\u201d<\/p>\n\n\n\n

\"Opinion<\/figure><\/div>\n\n\n\n

Carve-outs by the Government<\/h3>\n\n\n\n

The government has presented some carve-outs so that not every foreign remittance will be subject to TCS. They are as follows-<\/strong><\/em><\/p>\n\n\n\n