TCS on Foreign Remittance: How to Claim Your LRS TCS Back

If your bank or travel agent deducted TCS when you sent money abroad or bought an overseas tour package, you do not lose that money. Tax Collected at Source is not an extra tax. It is an advance against your own income tax, and you claim it back through your income tax return. You either get it adjusted against the tax you owe, or you receive it as a refund.

This guide explains, for the financial year 2025-26 (assessment year 2026-27), when TCS applies on foreign remittances under the Reserve Bank of India Liberalised Remittance Scheme (LRS) and on overseas tour packages, the current rates, and the exact steps to get that money back when you file.

TCS deducted on an LRS remittance or a foreign tour package shows up in your Form 26AS and your Annual Information Statement (AIS). When you file your ITR, that amount is treated as tax already paid on your behalf. It first reduces any tax you owe. Anything left over is refunded to your bank account after the return is processed.

Under section 206C(1G) of the Income-tax Act, 1961, banks and authorised dealers collect a small percentage of the money you send abroad under LRS, and tour operators collect it on overseas tour packages. The bank pays this to the government against your PAN. It tracks large outbound spending, not a charge you forfeit. The whole amount is creditable against your tax liability.

Budget 2025 changed these numbers. The Finance Bill 2025 analysis published by PRS Legislative Research states plainly that “the threshold for TCS on remittances has increased from seven lakh rupees to Rs 10 lakh” and that “TCS will not be levied on remittances for education upto the amount of loan taken from a specified financial institution.” These changes took effect from 1 April 2025.

So for money sent on or after 1 April 2025:

• No TCS applies on the first Rs 10 lakh you remit under LRS in a financial year. The Rs 10 lakh is a yearly aggregate across your remittances, not per transaction.
• General remittances (gifts to relatives abroad, investment, maintenance of close relatives, and similar purposes) above Rs 10 lakh attract TCS at 20 per cent on the amount over Rs 10 lakh.
• Education funded otherwise than by a loan, and medical treatment abroad, attract TCS at 5 per cent on the amount above Rs 10 lakh.
• Education financed by a loan taken from a specified financial institution attracts no TCS at all, whatever the amount. This is the relief Budget 2025 introduced.
• Overseas tour packages are treated differently. TCS is 5 per cent on the package value up to Rs 10 lakh in a financial year, and 20 per cent on the value above Rs 10 lakh.

Whatever rate was collected, the full amount is yours to claim back. The rate only decides how much is collected up front, never whether you can recover it.

A note on dates: Budget rules change from year to year, so for money sent in a later financial year, check the current threshold and rates on the income tax portal. For the return you file now, the FY 2025-26 figures above apply.

1. Check Form 26AS and the AIS. Log in to the income tax e-filing portal at https://www.incometax.gov.in and open your Form 26AS and Annual Information Statement. The TCS your bank or tour operator collected appears there against your PAN, with the collector's name and the amount. If it is missing, ask the collector for the TCS certificate (Form 27D) and have them correct their return.
2. Keep your proof. Save the bank advice, the foreign remittance form (Form A2), the tour invoice, and the TCS certificate. You will not upload them, but you need them if the return is later questioned.
3. Enter it in your ITR. When you file your income tax return for AY 2026-27, the TCS figure flows into the tax-paid schedule. In most ITR utilities it is pre-filled from the AIS. Confirm the amount matches your records and that the full TCS is captured.
4. Let it adjust against your tax. The return computes your total tax liability for the year. The TCS is set off against that liability first, exactly like TDS on salary or interest.
5. Get the balance as a refund. If the TCS is more than the tax you owe, the surplus is refunded to your pre-validated bank account once the Centralised Processing Centre processes the return. Pre-validate the bank account on the portal so the refund is not held up.

You do not have to wait until you file to feel the benefit. The Finance (No. 2) Act, 2024 amended sub-section (2B) of section 192 so that an employer can take TCS collected from you into account while deducting tax on your salary. You report it to your employer using Form 12BAA, the statement notified by the Central Board of Direct Taxes through Notification No. 112/2024 dated 15 October 2024. Your employer then reduces the TDS on your salary by that amount, so your monthly cash flow improves instead of you waiting for a year-end refund.

• Wrong or missing PAN at remittance. If the bank collected TCS without your correct PAN, it may not show in your 26AS, and you cannot claim what is not recorded. Always give your PAN when remitting.
• Not pre-validating the bank account. Refunds are issued only to a pre-validated, PAN-linked bank account. An unvalidated account stalls the refund.
• Treating TCS as a sunk cost. Many travellers assume the tour-package TCS is gone. It is not. It is fully claimable in your return.
• Ignoring the AIS mismatch. If the AIS shows a TCS figure you do not recognise, raise feedback on the portal rather than leaving it; a mismatch can hold up processing.

Suppose during FY 2025-26 you remit Rs 18 lakh under LRS to pay your child's university tuition abroad, funded from your own savings and not from a loan. The first Rs 10 lakh carries no TCS. The Rs 8 lakh above the threshold is education funded otherwise than by a loan, so TCS at 5 per cent works out to Rs 40,000. The bank pays that to the government against your PAN. When you file your ITR for AY 2026-27, that Rs 40,000 is set against your tax for the year. If your total tax is Rs 25,000, the remaining Rs 15,000 is refunded to your bank account. If you had no taxable income at all that year, the entire Rs 40,000 comes back as a refund.

No. TCS is collected in advance and credited against your own income tax. You recover it fully by claiming it in your return, either as a set-off against tax due or as a refund.

Yes. The TCS on the tour package shows in your Form 26AS and AIS against your PAN. Claim it in your ITR the same way as any other TCS. It is adjusted against your tax and the balance is refunded.

You still file a return to claim the refund. Because you owe little or no tax, almost all of the TCS comes back to you as a refund once the return is processed.

For FY 2025-26, no TCS applies to education remittances financed by a loan from a specified financial institution, whatever the amount. If a bank collected it in error, it will still appear in your 26AS and you can claim it back in your return.

In your Form 26AS and your Annual Information Statement (AIS) on the income tax e-filing portal at https://www.incometax.gov.in. Both list the collector and the amount against your PAN. The collector can also give you a TCS certificate in Form 27D.

Yes. The Rs 10 lakh is an aggregate for each financial year. It resets on 1 April. Remittances are added up across the year to test the threshold.

• Section 206C(1G), Income-tax Act, 1961, governs TCS on LRS remittances and overseas tour packages.
• Finance Bill 2025 changes, including the Rs 7 lakh to Rs 10 lakh threshold and the education-loan relief, effective 1 April 2025.
• Finance (No. 2) Act, 2024 amendment to section 192(2B) and Form 12BAA (CBDT Notification No. 112/2024 dated 15 October 2024) for salaried employees claiming TCS credit against salary TDS.
• Income tax e-filing portal: https://www.incometax.gov.in
• For citizens who also want to hold public authorities to account, see The RTI Playbook.
• More citizen guides: https://righttoinformation.wiki

This article is general information for citizens and is not tax advice. Tax rules change with every Budget and depend on your individual facts. Verify the current threshold, rates, and effective dates on the income tax portal or with a qualified tax professional before acting.