InvestorQ : How will tax collection at source (TCS) be deducted from 1st October 2020? & How can you claim the TCS money back?
Akansha Shivdasani made post

How will tax collection at source (TCS) be deducted from 1st October 2020? & How can you claim the TCS money back?

Answer
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Diya Chitale answered.
3 weeks ago


Remittances done under the LRS (Liberalised Remittance Scheme) will attract a 5% tax if it crosses Rs7 lakh in a financial year. However, individuals can claim credit for the TCS at the time of filing an income tax return in a manner similar to TDS or tax deducted at the source. An important point to note here is that this Rs 7 lakh exemption limit is applicable for the current financial year, i.e., April 1, 2020, till March 31, 2021, though the rule will be applicable from October 1, 2020.

So, if you have remitted any money after March 2020, then that will be counted while calculating the Rs 7 lakh exemption limit. If the remittance amount does not exceed Rs 7 lakh in fiscal, then you will not have to pay TCS. 

There are two ways by which you can get credit for the 5 % TCS. One is to claim an Income Tax refund, and the other is to claim TCS against your other tax liabilities for the year. If you claim a refund, you need to wait for the tax filing period. You will get credit for the 5% TCS, and it will be reflected in your Form 26AS.

The amount so collected will be reflected in Form 26AS and tax credit shall be available for the TCS. This can thereby help you reduce your overall income tax liability at the time of filing income tax returns.