These changes will impact certain specified remittances of funds from India such as investments 鈥� for example, acquiring shares under a global equity incentive plan, gifts, and vacations/tours.听 And where those remittances exceed a certain amount, a higher tax rate (20 percent as opposed to 5 percent) would apply.
The Interim Union Budget 2024, presented by India鈥檚 central government, outlines the fiscal roadmap for the country until a full budget is introduced in July 2024.1
Tax Collection at Source on remittances under the Liberalised Remittance Scheme (鈥淟RS鈥�) and payments for overseas tour programme packages have been rationalised.
For additional coverage of India's Interim Budget, see "Insights into the Interim Union Budget 2024" and other related documents on the 乐鱼（Leyu）体育官网 in India webpageopens in a new tab.
WHY THIS MATTERS
Tax Collection at Source (TCS)
The Finance Bill, 2024, has proposed the following changes in the TCS regime for remittances under the Liberalised Remittance Scheme (LRS) and payments for overseas tour programme package.
Reduction in TCS rates for remittances/payments less than INR 7 lakh2 with retrospective effect from 1 July 2023:
- Remittances under LRS, other than for education and medical treatment 鈥� TCS rate reduced from 20 percent to nil.
- Payments for overseas tour program package 鈥� TCS rate reduced from 20 percent to 5 percent.听
20 percent TCS rate for remittances/payments in excess of INR 7 lakh made effective from 1 October 2023 for3:
- Remittances under LRS, other than for education and medical treatment
- Payments for overseas tour program package.
(For prior coverage, see GMS Flash Alert 2023-172, 12 September 2023.)
乐鱼（Leyu）体育官网 INSIGHTS
Taxpayers should note that, generally speaking, on their income tax returns TCS deductions may be claimed as refunds or credits.听 It is recommended they consult with their usual tax professional or a member of the tax team with 乐鱼（Leyu）体育官网 in India (see the Contacts section).听
Contacts
Footnotes
1聽 For the text of the Budget speech and related documents, see: .
2聽 For the meaning of the currency expression 鈥淟akh,鈥� see the Oxford English Dictionary by clicking .听 Please note that by clicking on this link you are leaving the 乐鱼（Leyu）体育官网 website for an external (non-乐鱼（Leyu）体育官网, non-governmental) site, that 乐鱼（Leyu）体育官网 is not affiliated with nor doe s乐鱼（Leyu）体育官网 endorse its content.听 Use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.
3聽 Extension was given in the press release dated 28 June 2023 / Circular no. 10 dated 30 June 2023 issued by the CBDT. 聽It is now proposed to be codified in the law.
Disclaimer
The information contained in this newsletter was submitted by the 乐鱼（Leyu）体育官网 International member firm in India.
GMS Flash Alert is a Global Mobility Services publication of the 乐鱼（Leyu）体育官网 LLP Washington National Tax practice. The 乐鱼（Leyu）体育官网 name and logo are trademarks used under license by the independent member firms of the 乐鱼（Leyu）体育官网 global organization. 乐鱼（Leyu）体育官网 International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind 乐鱼（Leyu）体育官网 International or any other member firm vis-脿-vis third parties, nor does 乐鱼（Leyu）体育官网 International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
漏 2024 乐鱼（Leyu）体育官网 Assurance and Consulting Services LLP, an Indian Limited Liability Partnership and a member firm of the 乐鱼（Leyu）体育官网 global organization of independent member firms affiliated with 乐鱼（Leyu）体育官网 International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the 乐鱼（Leyu）体育官网 global organization please visit聽/governance.