# Section 206C(1G): TCS on Foreign Remittance / Overseas Tour Package

## Who Must Collect?

1. Authorized dealer who receives amount under LRS of RBI for remittance from a buyer.

2. Seller of an overseas tour programme package who receives consideration from the buyer.

## Timing

At the earlier of:

Debit of amount payable by buyer, OR
Receipt of such amount.

## Rates of TCS

### A. Purchase of Overseas Tour Programme Package

5% up to ₹10 lakhs
20% on amounts exceeding ₹10 lakhs

### B. Remittance Outside India under LRS

Purpose	Rate
Education — funded by loan from financial institution u/s 80E	NIL
Education / Medical treatment (other than loan-funded)	5% on amount exceeding ₹10 lakhs
Any OTHER purpose	20% on amount exceeding ₹10 lakhs

## When TCS is NOT Collected

1. No double TCS — if seller has already collected TCS, AD shall not collect again.

2. If buyer is liable to deduct TDS under another provision and has done so.

3. If buyer is:

Central / State Government
Embassy, High Commission, Legation, Commission, Consulate
Trade representation of foreign state
Local authority
Other notified persons (subject to conditions).

## CBDT Notification 99/2022 (17.8.2022)

Section 206C(1G) does not apply to a buyer who is:

Non-resident in terms of section 6, AND
Does not have a PE in India.

Worked example

### Example 1

Example: Mr. X buys an overseas tour package costing ₹15 lakhs from a tour operator.

5% × 10,00,000 = ₹50,000 (on first ₹10L)
20% × 5,00,000 = ₹1,00,000 (on excess)
Total TCS = ₹1,50,000.

### Example 2

Example: Mr. Y remits ₹12,00,000 outside India for his son's MBBS, funded by a loan from SBI (financial institution u/s 80E).

Education funded by loan → TCS NIL.

### Example 3

Example: Mr. Z remits ₹15,00,000 outside India for personal investment in foreign shares.

Other-purpose remittance, only amount > ₹10L: 20% × 5,00,000 = ₹1,00,000.

### Example 4

Example: Mr. P remits ₹14,00,000 for medical treatment abroad (not loan-funded).

Excess over ₹10L = ₹4L; TCS = 5% × 4,00,000 = ₹20,000.

⚠️ Common exam mistakes

Applying the ₹10L threshold to overseas tour package purchases — for tour packages, TCS applies from rupee 1 (5% up to ₹10L, then 20%).
Charging TCS on full amount for LRS remittances instead of just the excess over ₹10L.
Forgetting the NIL rate for education loans satisfying section 80E.
Confusing the 5% rate (education/medical) with 20% (other purposes) for LRS.

Bare-Act text Section 206C(1G) · Income-tax Act, 1961 · click to expand

Section 206C(1G): Every person, being an authorised dealer, who receives an amount, for remittance out of India from a buyer, being a person remitting such amount out of India under the Liberalised Remittance Scheme of the Reserve Bank of India; being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package, shall, at the time of debiting of the amount payable by the buyer or at the time of receipt of such amount from the said buyer, by any mode, whichever is earlier, collect from the buyer, a sum equal to such rate as specified.

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Section 206C(1G) - TCS on LRS Remittance and Overseas Tour Programme Package

Worked example

⚠️ Common exam mistakes