Liberalised Remittance Scheme tax collection requires authorised dealers to apply differentiated rates and observe specified exclusions for qualifying remittances.

Section 394(1), Table serial number 7, requires authorised dealers to collect tax at source on aggregate Liberalised Remittance Scheme remittances exceeding Rs. 10 lakh. Collection is at 2% for education or medical treatment and 20% for other purposes. Collection does not apply where a seller has already collected tax under Table serial number 8, the remittance is an education loan from a specified financial institution, or the buyer has deducted tax under another provision.

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