In this Guide we are learning about TCS Refund on Foreign Remittance. In today’s modern world, the transfer of funds across countries has become a common thing. Whether it’s for personal reasons like sending money to family abroad or for business purposes like paying overseas suppliers, people often engage in foreign remittances. However, when making these remittances, individuals and businesses need to be aware of the Tax Collected at Source (TCS) or TDS regulations imposed by the government.

we will discuss the TCS refund on foreign remittances and we’ll also cover some most important topics in it, like What are TCS on foreign remittances, its exemptions, and its threshold limit so if you want to take knowledge about this then read our this article till the end.

What is TCS on foreign remittance ?

TCS(Tax Collected at Source) is a tax collection technique where the tax is collected by an individual seller or by a service provider from the buyer at the time of the transaction. The seller who collects the tax from the buyer is responsible for remitting the TCS to the Indian government.

In India, the government has imposed a TCS on foreign remittances under the Liberalized Remittance Scheme (LRS). This means that if you remit money abroad, the bank or other authorized dealer will deduct TCS at 20%.

The following remittances are exempt from TCS:

  • Educational purposes remittances up to a maximum of ₹7 lakh per year.
  • Medical purposes remittances up to a maximum of ₹7 lakh per year.
  • Meet the expenses of a relative who is a resident or lived in a foreign country.
  • Meet the costs of a charitable trust or a non-governmental organization(NGO).

TCS on foreign remittance threshold limit

The TCS on foreign remittance threshold limit is ₹7 lakh per financial year. This means that if you remit money abroad for any purpose other than education or medical treatment, and the amount is more than ₹7 lakh, the bank or other authorized dealer will deduct TCS at 20%. There are some exemptions to the TCS on the foreign remittance threshold limit.

Recently in Budget 2023 Govt Introduce the 20% TCS without any Threshold Limit on the International Credit Card Transaction & Overseas Tour Package or any Other Purpose apart from Medical and Eduction.

TCS Refund on Foreign Remittance 

If you have paid TCS on a foreign remittance that is exempt from tax, you can claim a refund. To do this you’ll need to file your ITR(income tax return) and claim the refund in the relevant section. You will also need to provide some important documents which are given below:-

  • copy of the TCS(Tax Collected at Source) certificate issued by the bank or other authorized dealer.
  • Proof of the purpose of the remittance, such as a copy of the tuition fee receipt or the medical bill.

The income tax department will process your refund claim within a reasonable time. it is important to note that the refund process of deducted TCS on foreign remittances can take some time.

अपनी इनकम टैक्स रिटर्न फाइल करने के लिए यहाँ क्लिक करे।


Q1. Who is responsible for collecting TCS on foreign remittances?

Ans: Authorized dealers or banks facilitating foreign remittances are responsible for collecting TCS.

Q2.  Are there any exemptions from TCS on foreign remittances?

Ans: Yes, certain remittances may be exempted from TCS based on the purpose or category of the remittance.

Q3. How can I claim a TCS refund on foreign remittance?

Ans: To claim a TCS refund, you need to follow the prescribed procedure and submit the necessary documents and application forms to the designated tax authority.