The increase in the TCS threshold for foreign remittances means that individuals sending money abroad will now face TCS deductions only if their total remittance exceeds ₹10 lakh in a financial year, up from the previous limit of ₹7 lakh.
This revision is expected to bring relief to those making smaller foreign transactions, particularly for education, travel, medical expenses, and investments. However, for remittances exceeding ₹10 lakh, the applicable TCS rates remain unchanged:
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By raising the threshold, the government aims to reduce tax-related burdens on smaller transactions while keeping compliance intact for larger international remittances.
The Liberalised Remittance Scheme (LRS), introduced by the Reserve Bank of India (RBI), allows resident individuals to send money abroad for education, medical treatment, travel, foreign investments, and gifting.
Before Budget 2025, the annual limit under LRS was ₹2.5 lakh (USD 250,000), but with this latest revision, individuals can now remit up to ₹10 lakh annually without facing TCS deductions. While LRS simplifies international transactions, it also comes with restrictions, including prohibiting remittances to high-risk FATF-listed countries and crypto-related transactions.
The TCS structure remains unchanged, ensuring strict compliance for higher-value remittances while making it easier for individuals and businesses managing international financial commitments.