Is TCS Applicable on NRO Remittance?

The TCS on foreign remittance from NRO account

is applicable in certain remittances from Non-Resident Ordinary (NRO) accounts under Indian tax laws. The TCS on remittance is governed by Section 206C(1G) of the Income Tax Act, which came into effect on October 1, 2020, as part of the Liberalized Remittance Scheme (LRS).

TCS is applicable when funds are transferred from an NRO account to a foreign account or when NRIs remit money abroad from India. The key points are:

TCS on remittance from NRO account is triggered if the aggregate remittance during a financial year exceeds Rs. 7 lakh (INR). Any remittance above this threshold will attract TCS.

1. 5% TCS is applicable on the amount exceeding Rs. 7 lakh.

2. If the remitter has not provided a PAN or Aadhaar, the rate increases to 10%.

A concessional TCS rate of 0.5% is applied if the remittance is for education and the remittance is financed by an education loan. However, for general education-related remittances not funded by loans or for medical expenses, the standard 5% TCS rate applies once the Rs. 7 lakh limit is crossed.

TCS is not applicable if the total remittance during the financial year is less than Rs. 7 lakh. The remittance falls under categories specifically exempted by the government, like certain investments through government programs.

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TCS on foreign remittance from NRO account

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I’d like to help you with your query, Is there TCS on NRO account?

Is TCS Applicable on NRO Account?

• I’d like to say that TCS (Tax Collected at Source) is not applicable on money remitted by NRIs (Non-Resident Indians) from their NRO (Non-Residential Ordinary) account to their NRE (Non-Residential External) or foreign account

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• Therefore, as there is no TCS on remittance from NRO account, NRIs can easily remit their Indian earnings—such as pension, dividend, salary, rent, investment, profits from businesses permitted for repatriation, and distribution from any type of deposits—using their NRO account without TCS implications.

I hope this helps you understand the applicability of TCS tax for NRI.

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I’d love to answer your query, Is there any TCS on foreign remittance from NRO account? If the purpose of the transfer is under LRS (Loan to NRI or Gift to NRI), TCS will be applicable on transfers from a domestic account to an NRO account.

Let us delve more into this topic

Is TCS applicable on NRO remittance?

Yes! TCS is applicable to NRO remittances. 

How NRIs can Save TCS on Foreign Remittance?

• Repatriation:

This refers to the transfer of funds by NRIs or PIOs from their NRO account balance to an NRE account or an overseas bank account. According to Section 206C(1G), TCS does not apply to money transferred by NRIs from their NRO account to their NRE/foreign account.

TCS is not applicable if the buyer is:

• Government

• Remittance on account of an overseas tour program package

I’d like to conclude my answer here about TCS on foreign remittance from NRO account. I hope this helps:)

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