How to get 5% TCS for remittances beyond ₹7 lakh

The ministry of finance on 28 June deferred the applicability of increased TCS, or tax collected at source, rate of 20% on overseas tour packages and remittances under the Liberalised Remittance Scheme for a further period of three months, from 1 July to 1 October. Before the budget announcements, a uniform TCS rate of 5% was applicable on all kinds of remittances under LRS, so the question of prioritising them to make best use of the threshold exemption limit of ₹7 lakh was irrelevant. However, the TCS rate on LRS remittances for investments in foreign stocks, bonds, real-estate, gifts, donations, living expenses of relatives abroad, etc., has been increased to 20% with effect from 1 October, vis-à-vis the lower TCS rate of 5% applicable in case of remittances towards foreign education and medical treatment abroad. For instance, consider that a person has to remit ₹2 lakh towards foreign education, ₹2 lakh towards medical treatment abroad and ₹4 lakh towards investments in foreign stocks, on or after 1 October. It has been clarified that in respect of overseas tour package, the threshold limit of ₹7 lakh will apply independently for availing the benefit of reduced TCS rate of 5% and this is not required to be clubbed together with LRS remittances.