What is TCS on LRS in India?

Tax Collected at Source under Section 206C(1G). AD bank collects 20% on outward remittances above INR 10 lakh per financial year for investment, maintenance and most LRS purposes. Education-loan-funded 0.5%, education-self-funded or medical 5% above INR 7 lakh. Tour package 5% up to INR 7 lakh, 20% above.

Is TCS on LRS a tax or deposit?

A deposit, not a tax. It is advance tax collection credited against the remitter's final income tax for the year via Form 26AS. Excess refunded via ITR.

Does credit card spend abroad attract 20% TCS?

Under current CBDT clarification, credit card spend abroad is excluded from LRS and NOT subject to 20% TCS. Policy has been contested; verify current CBDT position for large credit-card obligations.

/ Free Tool · LRS TCS · FY 2025-26

LRS TCS Calculator.

Calculate 20% TCS on foreign remittance under Section 206C(1G). Pick your remittance category, enter the amount, see the TCS collected by the AD bank + total cash outflow + ITR credit position. Free tool by CA Durgesh Chavda for Indian founders and families remitting abroad.

Inputs

Enter your planned remittance details. All fields in INR unless marked otherwise.

Remittance category Determines TCS rate and threshold.

Remittance amount (INR) The amount you want to send abroad in this transaction.

Already remitted this financial year under same category (INR) Threshold is cumulative per FY. Enter prior remittances in this FY under this category; 0 if none.

Expected final income tax liability for the year (INR) Rough estimate of your total Indian income tax for FY 2025-26. Used to show whether TCS is fully credited or refundable.

TCS collected by AD bank

INR 0

Rate: 20% above INR 10 lakh threshold

Remittance amount INR 0

TCS-exempt portion INR 0

TCS-taxable portion INR 0

TCS collected INR 0

Total cash outflow (remittance + TCS) INR 0

Expected ITR position —

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How TCS on LRS works

Section 206C(1G) of the Income Tax Act requires Authorised Dealer (AD) banks to collect TCS on outward LRS remittances by Indian residents. Current rates (effective 1 October 2023):

Overseas education financed by education loan: 0.5% above INR 7 lakh/year
Overseas education from own funds / medical: 5% above INR 7 lakh/year
Overseas tour package: 5% up to INR 7 lakh/year, 20% above
All other LRS (investment / maintenance / gift / other): 20% above INR 10 lakh/year

The TCS is NOT a tax; it is advance tax credit against the remitter's final Indian income tax for the year. Claimed on ITR as TCS credit via Form 26AS. If TCS exceeds final tax, excess is refunded (12-18 months typical).

Who pays: the Indian resident remitter. The AD bank collects at the time of remittance. The remitter receives Form 27D as proof.

What's exempt: credit-card spend abroad (currently, under CBDT clarification), business remittances via FEMA automatic/approval route (not LRS), repayment of foreign loans.

Who needs this.

Indian founders funding a Delaware C-Corp or Wyoming LLC setup via FEMA ODI.
Indian founders setting up a Dubai Free Zone LLC or Singapore Pte Ltd.
Parents paying overseas tuition fees.
Patients funding overseas medical treatment.
Individuals making overseas gifts, inheritance distributions, or investments.
Investors buying US stocks via Indian broker platforms using LRS.

Full regulatory context: TCS 20% on Foreign Remittance LRS 2026 - Full Guide.

FAQ

Is TCS on LRS the same as a tax?

No. It is a deposit - advance tax credit against your final income tax liability for the year. If your final tax is lower than TCS collected, excess is refunded via ITR. The problem is the 12-18 month working-capital lock-up.

Does credit card spend abroad trigger 20% TCS?

Under current CBDT clarification, credit-card spend abroad is excluded from LRS and NOT subject to 20% TCS. However, policy has been contested in various announcements. For large credit-card obligations, verify current CBDT position before relying on this exclusion.

Can I split a large remittance across financial years to avoid TCS?

Yes, if timing allows. The INR 10 lakh threshold is per financial year (April-March). Remitting INR 9 lakh in March and INR 9 lakh in April falls in two different FYs, both below threshold. Combined with spouse's separate LRS limit, you can structure larger remittances tax-efficiently.

How do I claim TCS back on my ITR?

The AD bank issues Form 27D. TCS reflects in Form 26AS / AIS within 1-2 months. File your annual ITR; TCS credit automatically applies to final tax liability. Excess (if any) is refunded by the Income Tax Department, typically 12-18 months after ITR filing.