Module: General Practice
Q11: With reference to the Liberalized Remittance Scheme (LRS) for resident individuals, consider the following statements regarding the permissible limits and tax implications (Tax Collected at Source - TCS) as of the Financial Year 2025-26:
The overall limit for remittance is USD 250,000 per financial year per individual.
For education financed by a loan from a financial institution, the TCS rate is 0.5% for amounts exceeding ₹7 Lakh.
For all other LRS remittances (excluding education and medical treatment) exceeding ₹7 Lakh, the TCS rate is 20%.
Which of the statements given above are correct?
For education financed by a loan from a financial institution, the TCS rate is 0.5% for amounts exceeding ₹7 Lakh.
For all other LRS remittances (excluding education and medical treatment) exceeding ₹7 Lakh, the TCS rate is 20%.
Which of the statements given above are correct?
✅ Correct Answer: D
Statement 1 is Correct: The LRS limit remains USD 250,000 per financial year (April-March). Statement 2 is Correct: A concessional TCS rate of 0.5% applies to remittances for education if the amount is obtained through a loan from a financial institution (defined under Sec 80E), for amounts > ₹7 Lakh.
Statement 3 is Correct: Following the Finance Act 2023 (effective Oct 1, 2023) and continued into 2025, the TCS rate was increased to 20% for other LRS purposes (like tourism, investing in stocks/property abroad) for amounts exceeding the aggregate threshold of ₹7 Lakh in a financial year.
Statement 3 is Correct: Following the Finance Act 2023 (effective Oct 1, 2023) and continued into 2025, the TCS rate was increased to 20% for other LRS purposes (like tourism, investing in stocks/property abroad) for amounts exceeding the aggregate threshold of ₹7 Lakh in a financial year.