The rise of revenue department

The rollback in TCS rates for remittances reveals a pre-reform mindset of tax collectors

On June 28, the government announced yet another change — the third since February 2023 — in its system of tax collection at source (TCS) on payments under the Liberalised Remittance Scheme (LRS) and overseas tour packages.

The first change was announced on February 1, 2023, when the Budget for 2023-24 was presented. Accordingly, the annual threshold of Rs 7 lakh for triggering the levy of TCS on remittances under the LRS was to be removed from July 1, 2023. In other words, the TCS levy was to be applied on all LRS remittances. Moreover, the rate of TCS was to