Outlook Money
When money is sent overseas under LRS, all resident individuals including the minors, are allowed to freely remit up to $2.50 lakh per financial year.
Tax collected at source (TCS) is applicable when sending money abroad.
TCS is applicable on foreign tour packages, online shopping from foreign websites, investing in a foreign asset or instrument, and giving loans to relatives living overseas etc.
Exemption from TCS is applicable up to Rs 7 lakh if the money sent is for educational expenses.
For transactions that are above Rs 7 lakh, TCS charges of 0.5 per cent are applicable, if funds provided are loans by financial institutions.
Medical expenses up to Rs 7 lakh come under exemption.
TCS rates increase in certain cases, which include if the person remitting funds does not submit his/her PAN card.
TCS paid is not applicable on any additional taxes. A refund claim can be filed if TCS is paid more than the actual tax liability in a financial year.