Outward remittances under LRS down 37% in first month of TCS
Outward remittances by resident Indians declined 37% in October, the first month after the government stepped up tax deductions at source on such expenses, data from the Reserve Bank of India (RBI) showed.
In October, outward remittances under the liberalised remittances scheme, or LRS, fell to $2.1 billion from $3.5 billion in September.
All major heads — overseas travel, educational expenses, maintenance of close relatives, and investments in deposits and equities — fell sharply.
Among all major eligible segments for remittances, overseas travel accounted for 63 percent of outward remittance during the month and fell 22 percent to $ 1.4 billion from $ 1.8 billion in September.
«The new 20% TCS requirement has surely affected spends on international travel given the additional cash flow impact. In addition to this, several resident individuals have LRS accounts overseas with accumulated funds,» said Moin Ladha, legal services partner, Khaitan and company.
