Section 206C mandates tax collection from certain sales such as alcohol, scrap, etc. Its sub-section 1G necessitates tax on foreign remittances under the Liberalised Remittance Scheme (LRS) and Overseas Tour Program Packages (OTPP) sales.
The Finance Act 2023 made significant changes to 206C(1G) effective from July 01, 2023:
‣ The Rs. 7 lakh limit for LRS remittance has been abolished.
‣ The TCS rate for LRS remittance and OTPP sales rose from 5% to 20%.
‣ A 5% TCS is applicable for educational or medical treatment remittances.
‣ Tax collection occurs when remittances for education or medical treatments surpass Rs. 7 lakhs.
In response to Stakeholders' feedback, the Government altered the TCS rules, announcing several modifications to Section 206C(1G). This piece summarises these changes and the adjusted TCS rates for different remittances.
