Changes in TCS Rates Effective from 1st April 2025
Indian TaxationChanges in TCS Rates Effective from 1st April 2025
🚨 Important Update: New TCS rules for foreign remittances under LRS with revised exemption limits and rates!
✈️ Foreign Travel
- ✅ No TCS on spends up to ₹10 lakh (till 31st march 2025, This limit stands at 7 lakh)
- 📈 5% TCS on amount exceeding ₹10 lakh
- The new rules offer relief by raising the exemption threshold and lowering the applicable rate.
- ✅ The government has removed TCS on education remittances made through loans
- 📚 5% TCS on self-funded education expenses above ₹10 lakh
- ✅ No TCS up to ₹10 lakh (w.e.f 1st April 2025)
- 💊 5% TCS will be applicable on amounts exceeding ₹10 lakh for medical treatments abroad.
- 📈 20% TCS above ₹10 lakh (w.e.f 1st April 2025)
- 📦 Applies to stocks, real estate, and gifts
- 🎉 Previously, businesses had to collect a 0.1% TCS on sales
- 💰 Exceeding ₹50 lakh in a financial year. This requirement will be abolished, simplifying tax compliance and improving cash flow for traders.
| Purpose of Remittance | Current Threshold FY 2024-25 | Proposed Threshold from FY 2025-26 | TCS Rate |
|---|---|---|---|
| Overseas Tour Packages | INR 7,00,000 | INR 10,00,000 | 5% |
| Overseas Tour Packages | Above INR 7,00,000 | Above INR 10,00,000 | 20% |
| Travel (without package) | INR 7,00,000 | INR 10,00,000 | None |
| Travel (without package) | Above INR 7,00,000 | Above INR 10,00,000 | 20% |
🎓 Education Remittances
| Purpose of Funds | Amounts above INR 7,00,000 F.Y. 2024-25 | Amounts up to INR 7,00,000 F.Y. 2025-26 |
|---|---|---|
| Education abroad- financed with a loan | 0.5% of the amount. | No TCS charges at all |
| Education abroad - self-financed | 5% of the amount. | No TCS charges (upto 10 lakhs) beyond 10 lakhs 5% TCS applies |
🏥 Medical Expenses
| Outward Remittance Purpose | TCS Rates F.Y 2024-25* |
|---|---|
| LRS for Medical Treatment purposes | 5% for any amount above INR 7,00,000. |
| LRS for other purposes | 20% for any amount above INR 7,00,000. |
💼 Investments, Gifts and other purpose
📦 Sale of Goods
📌 What is TCS?
Tax Collected at Source (TCS) is a tax that sellers or financial institutions collect from buyers or remitters at the time of transaction. It ensures advance tax collection on specific high-value transactions, simplifying tax compliance for the government.
These changes are likely to come in to effect from 1st April, 2025. The information being posted here should not be treated as legal advice and has been published for knowledge purpose only, please do consult your independent tax advisor or banker for an informed legal decision. You may write to us for an one on one discussion about TCS or any other Tax topic by dropping a comment below.
This article has been published by CA. Neha Jain, she is the partner of V A N and CO LLP and practices in Bengaluru.
