Accordingly money flowing out of india is being taxed with tax deduction at source added on services like foreign tour packages and remittances as the outgoing funds flow is sought to being taxed. As per report the Budget 2020-21 has mandated a 5 per cent tax collection at source for remittances over Rs 7 lakh. Furthermore Mohandas Pai, Chairman, Aarin capital has criticised the TDS on foreign remittances. He said: "This is very wrong; Why is there a Tax on our own tax paid money when we remit? Where is ease of living?."
Apparently, it looks like that money flowing out of india is being taxed in the form of remittances or travel. Some people have said that they will make the remittances for education by march 31 as the provision kicks in from april 1. Perhaps a new TDS provision has been introduced on foreign remittance. Authorized foreign exchange dealer receiving an amount of Rs 7 lakh or more in a financial year for remittance out of india under the LRS scheme of the bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi shall collect tcs (tax at source) of 5 per cent from the buyer, being a person remitting such amounts out of India. In the case of non PAN/Aadhar cases the rate is 10 per cent.
Moreover LRS is used for sending money for children studying abroad, buying property abroad and buying stocks listed in exchanges abroad. Also the LRS is limited to $250,000 per year per person. ON sending more than Rs 7 lakh year, 5 per cent of that amount will be deducted by the FX dealer and paid as tcs to the Income tax department. Accordingly the seller of overseas tour packages shall collect tcs of 5 per cent from the buyer.
