Sending Money Abroad? Here's How to Reclaim Your TCS

For individuals sending money abroad under the Liberalized Remittance Scheme (LRS), the tax collected at source (TCS) on such transactions can be reclaimed. The following steps outline how to navigate this process:

Understanding TCS on Foreign Remittances
When remitting funds under LRS, such as sending money to your child abroad, the transaction is subject to TCS as per the provisions of the Income Tax Act. The authorized dealer bank (AD bank) facilitating the transaction collects this tax and deposits it with the tax authorities.
The AD bank also issues a TCS certificate (Form 27D), which serves as proof of the tax paid. This certificate will reflect in your Form 26AS (Annual Tax Credit Statement) and your Annual Information Statement (AIS) available through your income tax e-filing account.

How to Claim TCS Credit
1.    Adjust Against Tax Liability: You can claim the TCS as credit against your overall tax liability when filing your income tax return.
2.    Self-Assessment Tax and Advance Tax: While calculating your advance tax instalments or self-assessment tax liability, you can factor in the TCS paid.
3.    Reporting in ITR: Ensure that the TCS is reported correctly under the "Schedule Tax Payments" section of your income tax return form.

For Salaried Employees
Effective October 2024, salaried employees have the option to declare their TCS details to their employer. The employer can then adjust this amount as a credit against the monthly tax deducted at source (TDS) from their salary.

Key Considerations
•    Keep track of your Form 27D and Form 26AS to ensure that the TCS amount is accurately recorded.
•    Verify that the TCS is reflected in your AIS to avoid discrepancies during the filing process.
•    Consult a tax advisor if you face challenges in claiming the credit.
By following these steps, taxpayers can ensure that the TCS on foreign remittances is reclaimed efficiently and accounted for in their tax returns.