Navigating the Increased 20% TCS on Foreign Remittances Under LRS

The Indian Union Budget often introduces significant policy shifts, and the Amrit Kaal Budget 2025 was no exception. Beyond social initiatives and broader economic reforms, specific regulations impacting individual investors garnered considerable attention. One such critical change is the implementation of a 20% Tax Collected at Source (TCS) on foreign remittance transactions conducted under the Liberalized Remittance Scheme (LRS). This update necessitates a clear understanding for any Indian investor looking to transact internationally.

What is Tax Collected at Source (TCS)?

TCS, or Tax Collected at Source, is a form of income tax collected by the seller from the buyer at the point of sale for specified goods and services. In the context of international financial transactions, TCS is levied on the remitter (the individual sending money abroad) by the authorized dealer bank.

It's important to recognize that