InvestorQ : What type of transactions is TCS applicable to? & Are there any exemptions to the rule?
Akansha Shivdasani made post

What type of transactions is TCS applicable to? & Are there any exemptions to the rule?

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Isha Tharwani answered.
4 weeks ago
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The 5% TCS and Rs 7 lakh exemption limit applies to most of the remittance transactions. Money can be remitted under the LRS option for several purposes.

  • Medical treatment, donations, gifts, maintenance of a close relative
  • Overseas education
  • Foreign travel
  • Investment, like property or international stocks

Yes. These can be explained as follows-

Overseas education: The 5% TCS rate will be reduced to 0.5% for those who have taken an education loan. The exemption limit of Rs 7 lakh will be allowed as long as the education loan follows the norms defined under section 80E of the Income Tax Act.

Overseas travel package: When you remit money for purchasing an overseas travel tour package, you would not get the exemption of Rs 7 lakh and have to pay TCS on the total amount of remittance. For example, if you pay Rs. 12 lakh towards an overseas travel package, then you need to pay 5% TCS on the entire Rs 12 lakh.

Non-submission of PAN: If you do not furnish your PAN details, then tax will be collected at the rate of 10% instead of 5%.
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