Budget 2025: TCS rationalisation to benefit investors willing to invest in global markets
tax collected at source (TCS).
Finance Minister Nirmala Sitharaman on Saturday increased the threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) from Rs 7 lakh to Rs 10 lakh. She also proposed to remove TCS on remittances for education purposes, where the remittance is out of a loan taken from a specified financial institution.
Sitharaman presented her 8th Budget and second one in the Modi 3.0 government, on Saturday.
“The announcements around easing TCS are a welcome move and align with the government’s objective to reduce the tax compliance burden on individual investors. Removing TCS on education-related remittances funded through loans and raising the TCS threshold under the Liberalized Remittance Scheme from Rs 7 lakh to Rs 10 lakh is a smart move and helps simplify tax compliance for individuals. These changes not only make it easier for students and families managing educational expenses abroad but also offer greater flexibility for investors diversifying into global markets, including US stocks." said Nikhil Behl, Co-Founder & CEO, Stocks at INDmoney.
Harsh Bhuta, Partner, Bhuta Shah and Co LLP said that the proposed changes in TDS and TCS under the Finance Bill, 2025, could mark a significant shift towards more streamlined and taxpayer-friendly measures.
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