Have foreign shares in stock portfolio? New tax rule applying from next month

livemint.com:

tax collection at source (TCS) rate on forex outward remittances by resident individuals under Liberalised Remittance Scheme (LRS) has been hiked. Starting 1 October 2023, the new TCS rate for forex outward remittance will be applicable. The tax collection at source or TCS is collected by the seller at the point of sale.

Banks deduct TCS on foreign remittances. The TCS limit for foreign remittances in India is currently set at 5% for all foreign remittances exceeding ₹7 lakh in a financial year. But from 1 October 2023, the new TCS rate will be 20%.

Exciting news! Mint is now on WhatsApp Channels :rocket: Subscribe today by clicking the link and stay updated with the latest financial insights! Click here On foreign remittances for overseas investment, a 20% TCS will be levied over a threshold limit. A 20% TCS rate will be applied on investments of more than ₹7 lakh in foreign stocks, mutual funds, cryptocurrencies, or property in a financial year. While credit card transactions are exempted from TCS, debit or forex cards will attract 20% from October 1 if the spending exceeds ₹7 lakh.

According to Divakar Vijayasarathy, Founder, and CEO, of DVS Advisors, TCS at 20% may not impact the net worth individuals (HNIs) much since the credit of TCS would reduce their advance tax liability. For other remitters, who do not have significant tax liability, the increased TCS rate would be an added cost of remittance since the refund of TCS would be available only at the time of filing their return of income, he added. The TCS rate on remittances for the purpose of education and medical treatment remains unchanged at 5% above a threshold limit of 7 lacs.