Nil Tax Collection at Source on LRS can apply

[PRIYAM KHAMBHATA]

Respected Sir

A private discretionary trust created through a `Will', who will be planned to remit the funds more than Rs.10 L out of its current income to it Beneficiaries (NRI). Bank Authority is stated that TCS would be collect on LRS @ 20%.

A private discretionary trust net Effective Tax Liability would be @ 5% approx. on total income. In this position, what should to do by a Private Discretionary Trust for less Tax collection at source or to the extent of effective tax liability.

Please guide me.

AI Summary

LRS tax collection at source on discretionary trust remittances is questioned where effective tax liability is lower.
A private discretionary trust created under a will proposes remittances of current income to NRI beneficiaries under the Liberalised Remittance Scheme. The bank has indicated TCS at 20% on qualifying remittances, while the trust's effective tax liability is estimated to be lower. The issue is whether nil or reduced TCS may be obtained, or whether collection may be limited to the trust's effective tax liability.