Transferring ₹35 Lakhs to the UK: Minimizing TCS

1. Liberalised Remittance Scheme (LRS) Exemption

   • ₹10 Lakh annual limit per person—no TCS up to this amount.

2. Split Across Financial Years

   • Mar 2025: Transfer ₹10 Lakh (0% TCS)

   • Apr 2025: Transfer another ₹10 Lakh (0% TCS) + ₹15 Lakh taxed at 20% = ₹3 Lakh

3. Use Family Members’ Quotas

   • Spouse/parents each get ₹10 Lakh exemption

   • Remaining ₹5 Lakh incurs 20% TCS = ₹1 Lakh

4. Education-Loan Route (if applicable)

   • Remittances against a sanctioned education loan attract 0% TCS regardless of amount.

5. Claiming TCS Refund

   • Report TCS in your ITR and Form 26AS.

   • Submit TCS certificates (Form 27D).

   • Refund processed within ~4–5 weeks.

• Since 1 October 2023, under Section 206C(1G), banks are required to collect TCS @20% on overseas remittances under the Liberalised Remittance Scheme (LRS) exceeding ₹7 lakh in a financial year, if not for education/medical purposes.

• TCS is not a tax on the transaction — it’s an advance tax credit.
  You can claim it back when you file your ITR, but you must first pay it upfront.

Ways to avoid or reduce the 20% TCS hit

A. Split transfers across years / under ₹7 lakh

• TCS is only on aggregate remittances above ₹7 lakh in a financial year.

• If you can spread transfers over multiple financial years (or months until April 1) and keep each year’s total ≤₹7 lakh, you avoid the 20% TCS completely.

• Downside: slower fund movement, may not work if you need all money immediately.

B. Use NRE/NRO account exemptions (if applicable)

• NRE account funds are freely repatriable without TCS (since they’re already foreign-sourced).

• But your ₹35 lakh is from Indian earnings, so unless you had an NRE account from earlier NRI days, this won’t apply.

C. Transfer after becoming NRI using FCNR/NRO → overseas

• Once you qualify as an NRI for FEMA purposes (typically after 183 days outside India), you can transfer from NRO account abroad without TCS using Form 15CA/CB process.

• If your move is permanent and you can manage Indian expenses from smaller retained funds, you could keep the money here until NRI status is official.

D. Education/medical purpose remittance route

• If any remittance qualifies as education or medical treatment (with documentary proof), TCS is much lower (0.5%–5%) or NIL.

• Not applicable for your rent/security deposit unless linked to formal higher education enrolment.

E. Employer-arranged transfer

• If your UK employer can pay your initial UK expenses directly and you reimburse them from India in smaller instalments (≤₹7 lakh/year), you avoid triggering TCS.

• Requires cooperation from the employer.

Practical options for you right now

Since you’re already in the UK job and need the money soon:

• Option 1: Transfer ₹7 lakh now, ₹7 lakh after April 1, 2025, and so on — no TCS at all.

• Option 2: If you need a bigger chunk, accept that TCS is refundable and plan to claim it back in your ITR. It’s a cash flow issue, not a tax loss.

• Option 3: Wait until you are an NRI under FEMA and then remit as NRO → UK, which avoids LRS TCS.

Important

Avoid trying to bypass through friends’/relatives’ accounts — the ITD can link PAN-based transfers, and it may raise suspicion of structuring.

We can assist you in preparing a cash flow plan showing exactly how to legally move ₹35 lakh to the UK in stages without triggering the 20% TCS, while meeting your initial rent/security needs.

Feel free to reach out to us !
www.thewitcorp.com

- TCS @20% will be collected under the LRS. LRS is applicable to an individual resident

- Rs.10 lac limit is per person in a financial year

- TCS will be collected on the amount in excess of Rs.10 lacs