|Customer A||Makes a remittance of Rs 6,50,000 on Apr 01, 2020||No TCS will be collected|
|Makes a remittance of Rs 75,000 in the same year 2020||5% TCS will be collected on Rs 25,000 (Rs 6,50,000 + Rs 75,000) – (7,00,000)|
TCS on LRS
As per the Union Budget 2020, 5% Tax Collection at Source (TCS) is applicable for the Resident Individual on ICICI Bank Debit Card for transactions aggregating to Rs 7 lakh or more (across all channels within bank) in a financial year, under the Liberalised Remittances Scheme (LRS).
Narration in the statement will be: TCS Mon DD, YYYY DCR Account number
TCS on LRS transactions have been implemented on Debit Cards from Oct 01, 2020. For all the transactions falling under LRS, TCS shall be applicable on the amount in excess of Rs 7 lakh in a financial year. Below example is for your reference:
Once the threshold is crossed, TCS would be applicable on the incremental amount. Further, the credit of tax collected will continue to the buyer.
- TCS amount would be recovered from the customer’s account. Please ensure the account is sufficiently funded to cover the charges.
- TCS once collected cannot be refunded by the bank in case of any return of transaction or remittances.
- TCS certificate will be issued to the customer once the quarterly return filing is completed.
Is TCS deduction on LRS transaction a regulatory requirement?
Yes, TCS collection on LRS transactions is a regulatory requirement. This is amended under Section 206C of the Income-tax Act, 1961.
Am I eligible for any tax rebate?
TCS paid can be adjusted against tax payable when individuals who would have paid TCS file Income Tax Returns (ITR) in India. Please consult your tax advisor/consultant for further information.
Is TCS applicable at the Account level or PAN level?
TCS is applicable at PAN level. The LRS limit maintenance, TCS charging and TCS reporting is consolidated at the customer level i.e. at PAN level.
In case of return of transactions post debit from the account, will the TCS get refunded back?
TCS will not be reversed once debited. Remitter can approach for refund from tax authority through ITR or consult with tax advisor for refund/adjustment.