Proposed 5% tax on remittances from India to UK - for education tuition fees payments

Hi

While the tax on foreign tour packages will be 5% for any amount, for other foreign remittances, the tax will kick in only for the amount spent above ₹7 lakh.

For education-related foreign remittances funded by loans, though, the tax will be just 0.5% for the amount above ₹7 lakh, considering many Indian students take loans to pursue education abroad.

Under the Reserve Bank of India’s liberalized remittances scheme, individuals can remit a maximum of $250,000 abroad every year. The provision to collect tax on remittances was introduced in the Finance Act of 2020 subject to riders and notified on 27 March to take effect from 1 October.

to pay capital gain tax on capital is separate matter if you send remittance aborad then TCS will be deducted if total amt > 7 lac @ 5% on excess of Rs 7 lac

That is TCS and it will be collected by your dealer of foreign exchange and that needs to be done if the amount is above Rs. 7 lakh.

It is TCS and not TDS so you don't need to deduct the same.

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Thank you.

Hi,

There is no additional tax on foreign remittance. Its just TDS. You can understand it as an advance payment of tax.

At the end of year, if your advance tax is more than your tax liability, you will get refund of the excess amount.

Yes, TDS will be applicable. Pls note its not an additional tax burden.

Hi

Yes provision of TDS will be applicable.

If the remittance exceeds 7 lacs then TDS at 5% will have to be deducted.

Remittance from property sale funds will also attract TDS.

Hello,

Yes, TCS would be applicable if the remittance is above ₹7 lakh. The same would be available as a credit at the time of filing the income tax return. 

I hope this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

Even if the remittance is funded through property sale, TCS would be applicable.

Dear Sir,

Hope you are doing well !!

While the tax on foreign tour packages will be 5% for any amount, for other foreign remittances, the tax will kick in only for the amount spent above INR 7 lakh.

Yes, TCS will be applicable on the same.