TDS on SBI Foreign Education Loan Remittance kicks in from October 1. The SBI tweet said that the Tax Collection at Source (TCS) on Liberalized remittances scheme will be levied over and above the remittance amount of Rs 7 lakh by a customer in a financial year and will be effective from October 1. The limit f Rs 7 lakh will be determined by adding all LRS remittances (including out of disbursement of education loan) during the Financial year.
Every other foreign remittance of over Rs 7 lakh, will attract a tax-collected at source (TCS), unless the remittance is from an income that is already tax-deducted at source (TDS). In case of remittances made for overseas tour programmer packages, TCS is applicable on all remittances even if the amount is less than 7 lakh.
Under the Liberalized Remittance Scheme, authorized dealers may freely allow remittances by resident individuals up to USD 2,50,000 per Financial Year (April-March) for any permitted current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc.
The Scheme is available to all resident individuals including minors. In case of remitter being a minor, the Form A2 must be countersigned by the minor’s natural guardian.
Also Read – Fix – SBI Error ‘No Accounts Mapped for the User’ in Online Banking
Here’s all you need to know about the SBI Foreign Education Loan TCS Rate:
• A TCS of 5% was announced in Union Budget 2020. This rate is for foreign tour packages; for, other foreign remittances, it will apply only for an amount exceeding Rs 7 lakh.
• However, in case of education-related foreign remittances funded by loans, a TCS of 0.5% will be levied for an amount above Rs 7 lakh.
• While the rate of TCS is 5%, it will be 10% in case PAN or Aadhaar is not provided to an Authorised Dealer of the foreign exchange in question. In case of foreign travel, the TCS is collected by the travel operator.
• The TCS will not be applicable if you make all arrangements of foreign tour on your own. It will also not apply if the remitter is subject to the TDS, under the Income Tax Act, 1961.
• If tax has already been paid as TDS, and still the TCS is levied, you can claim a refund from the TCS.