UAE TAX RESIDENCY REGULATIONS AS APPLICABLE TO AN INDIVIDUAL
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May 11, 2023
Tax Collection at Source (TCS) for foreign remittances to be increased from 5% to 20%
The Union Budget 2023 increased Tax Collection at Source (TCS) on Foreign Remittances under LRS (Liberalised Remittance Scheme) from 5% to 20%. This will apply to foreign trips, sending money abroad and other personal remittances, except for education and medical purposes. This new rule will come into effect from Jul 1, 2023. Prior to the said changes, 5% TCS was applicable on Foreign Remittances above ₹7 lakh in a Financial Year.
As per the Union Budget 2023, the key changes are as below:
| Sr. No | Purpose of remittance | Present applicable Tax Regime | New Tax Regime as per Budget 2023 – w.e.f Jul 1, 2023 |
| 1 | Education :
If the amount being remitted overseas is a loan obtained from any financial institution as defined in Section 80E. |
0.5% of the amount or the aggregate of the amount in excess of ₹7 lakh in a Financial Year.
|
No Change
|
| 2 | Education and Medical
|
5% of the amount or the aggregate of the amounts in excess of ₹7 lakh in a Financial Year.
|
No Change
|
| 3 | Overseas tour package
|
5% without any threshold limit.
|
20% without any threshold limit.
|
| 4 | All other cases/ purposes
|
5% of the amount or the aggregate of the amounts in excess of ₹7 lakh.
|
20% without any threshold limit.
|
