Circular to remove difficulty in implementation of changes relating to Tax Collection at Source (TCS) on Liberalised Remittance Scheme (LRS) and on purchase of overseas tour program package
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Tax Collection at Source threshold restored for LRS; increased TCS rates deferred and credit card LRS inclusion postponed. The circular restores the Rs 7 lakh per individual per financial year threshold for applicability of TCS on all LRS remittances across modes and purposes; increases in TCS rates effected by the Finance Act, 2023 are deferred to take effect from 1 October 2023, with earlier rates applying until 30 September 2023. Classification of international credit card transactions as LRS is postponed; international credit card expenditures abroad are not subject to TCS until further order. The threshold is aggregated at the remitter level (not per purpose or dealer), authorised dealers may rely on remitter undertakings for prior remittances, and LRS purpose codes determine concessional rates for education and medical remittances. The threshold for LRS and the separate threshold for overseas tour program package operate independently, and an overseas tour package requires at least two specified elements to qualify.
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Provisions expressly mentioned in the judgment/order text.
Tax Collection at Source threshold restored for LRS; increased TCS rates deferred and credit card LRS inclusion postponed.
The circular restores the Rs 7 lakh per individual per financial year threshold for applicability of TCS on all LRS remittances across modes and purposes; increases in TCS rates effected by the Finance Act, 2023 are deferred to take effect from 1 October 2023, with earlier rates applying until 30 September 2023. Classification of international credit card transactions as LRS is postponed; international credit card expenditures abroad are not subject to TCS until further order. The threshold is aggregated at the remitter level (not per purpose or dealer), authorised dealers may rely on remitter undertakings for prior remittances, and LRS purpose codes determine concessional rates for education and medical remittances. The threshold for LRS and the separate threshold for overseas tour program package operate independently, and an overseas tour package requires at least two specified elements to qualify.
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