Estimate Tax Collected at Source on a sale at a given TCS rate.
TCS = sale amount × TCS rate / 100. Amount payable by buyer = sale amount + TCS. TCS applies to specific goods/transactions (e.g. foreign remittances, motor vehicles above a threshold, certain goods) at rates that vary — check applicability for your transaction.
Illustrative estimate only — tax rules change frequently and vary by jurisdiction/circumstance. Verify with an accountant or official source before relying on this.
TCS (Tax Collected at Source) on foreign remittances under the Liberalised Remittance Scheme (LRS) is one of the most misunderstood taxes in Indian personal finance, largely because people mistake it for an additional cost rather than what it actually is: a prepayment adjustable against your total income tax liability, fully reclaimable if your final tax bill is lower than the TCS collected. The threshold matters first — the first ₹10 lakh of LRS remittances in a financial year (aggregated across all your outward remittances combined, not per bank or per transaction) is entirely free of TCS.
Rates above that ₹10 lakh threshold vary meaningfully by purpose, and Budget 2026 brought real relief on two fronts: TCS on remittances for education and medical purposes dropped from 5% to 2% above the threshold, and TCS on overseas tour packages dropped to a flat 2% with no threshold at all (previously 5% up to ₹7 lakh and 20% beyond). Remittances for general investment or other purposes still carry a steeper 20% TCS above ₹10 lakh. One exception worth knowing: education funded through a qualifying education loan carries no TCS at all, even above the ₹10 lakh threshold. The practical bottom line: TCS collected is not money lost — it shows up as a credit against your total tax liability when you file your return, and if your actual tax owed is less than the TCS collected, the difference comes back as a refund, so budgeting for it as a genuine "extra cost" rather than a temporary cash-flow timing issue is the most common misunderstanding.
No — TCS is a prepayment that gets credited against your total income tax liability when you file your return. If your actual tax owed is lower than the TCS collected, you get the difference back as a refund. It's a cash-flow timing mechanism, not genuinely extra tax.
The first ₹10 lakh of LRS remittances per individual per financial year is entirely free of TCS. This threshold is aggregated across all your outward remittances combined (not per bank, not per transaction, not per remittance purpose except tour packages, which have their own separate rules).
Following Budget 2026 changes: education and medical remittances now carry 2% TCS above the threshold (reduced from 5%); overseas tour packages carry a flat 2% with no threshold at all; general investment or other-purpose remittances still carry 20% TCS above ₹10 lakh.
No — remittances for education specifically funded by a qualifying education loan carry Nil TCS, even for amounts above the ₹10 lakh threshold. This is a specific carve-out distinct from the general 2% rate that applies to education funded through other means.