Section 206C(1G) - TCS on Overseas Tour Packages and LRS Remittances
# TCS on Overseas Tour Packages and LRS Remittances — Section 206C(1G)
## Two Distinct Triggers
### A. Overseas Tour Programme Package (collected by seller of package)
Aggregate amount received in FY
TCS Rate
Up to ₹ 10 lakh
5%
Above ₹ 10 lakh
20% on excess
### B. LRS Remittances (collected by authorised dealer)
Purpose / Amount
TCS Rate
Up to ₹ 10 lakh (any purpose)
Nil
Above ₹ 10 lakh — for education funded by loan from notified institution
0.5% on excess
Above ₹ 10 lakh — for education (not loan-funded) or medical treatment
5% on excess
Above ₹ 10 lakh — any other purpose (gift, investment, etc.)
20% on excess
## Key Points
The two triggers are independent — buying a tour package and making an LRS remittance are tested separately at the seller/AD level.
Surcharge and cess on TCS are typically not applicable for residents.
Buyer can claim TCS as credit in his ITR.
Worked example
### Example 1
Example 1 — Mr. Raja pays ₹ 12 lakh to M/s Thomas Cook for a Singapore holiday package
Tour package: First ₹ 10 lakh @ 5% = ₹ 50,000. Excess ₹ 2 lakh @ 20% = ₹ 40,000.
Total TCS by Thomas Cook = ₹ 90,000.
### Example 2
Example 2 — Mr. Raja remits ₹ 13 lakh as gift to his sister abroad under LRS via Bank of India
Not for education / medical purpose → 20% on excess over ₹ 10 lakh.
TCS = ₹ 3 lakh × 20% = ₹ 60,000.
Bank of India (authorised dealer) is the collector.
⚠️ Common exam mistakes
Applying the LRS ₹ 10 lakh threshold to a tour package — tour packages have NO threshold (TCS applies from Re. 1 at 5%).
Using 5% rate on LRS remittances for gifts/investments — for non-education/non-medical purposes, the rate above ₹ 10 lakh is 20%.
Failing to identify the collector — seller for tour packages, authorised dealer (bank) for LRS.
Aggregating tour package amount and LRS amount when computing thresholds — they are separate triggers.
Bare-Act text Section 206C(1G) · Income-tax Act, 1961 · click to expand
Section 206C(1G) - Every person,— (a) being an authorised dealer, who receives an amount, or an aggregate of amounts, of seven lakh rupees or more in a financial year 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; (b) being a seller of an overseas tour programme package, who receives any amount from a buyer, being the person who purchases such package, shall, at the time of debiting 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 specified percentage of such amount as income-tax.