Last Updated On: 07 April 2025
Overseas travel and money transfers often come with TCS (Tax Collected at Source) charges, but assuming the money is lost would be a mistake! Don’t leave your hard-earned cash behind, because claiming a TCS refund or deduction is easier than you think. In this guide, we’ll walk you through everything you need to know about TCS, its charges on foreign remittances, and how to claim your refund or deduction smoothly.
So what is TCS?
TCS is the abbreviation for the term Tax Collected at Source. TCS is charged by sellers, to comply with the government tax norms, and is collected from buyers for specific purchase transactions.
Disclaimer: This article on TCS refund or deduction from ITR is for informational purposes only and does not intend to be tax advice. Please consult a financial advisor or a tax professional to get personalised guidance on your specific circumstances.
TCS on Foreign Exchange and International Remittance
According to LRS (Liberalised Remittance Scheme), resident Indians are bound to pay TCS for any type of foreign exchange transaction. This includes currency exchange, international money transfer, purchase of forex cards, and overseas transactions using forex, and debit cards.1
Here are the TCS charges for various forex purposes;
| Type of Forex Transaction | Rate of TCS for up to Rs. 10 Lakhs | Rate of TCS for Above Rs. 10 Lakhs |
| Education Purposes (financed by education loan) | Not Applicable | Not Applicable |
| Education Purposes (financed by other sources) | Not Applicable | 5% of the amount above Rs. 10 lakhs |
| Medical Treatment Abroad | Not Applicable | 5% of the amount above Rs. 10 lakhs |
| Tourism or Immigration | 5% of the total amount | 20% of the total amount |
| All Other Purposes | Not Applicable | 20% of the amount above Rs. 10 lakhs |
How to Show Foreign Remittance and Currency Exchange in ITR?
If you have sent money abroad or purchased foreign currency or a Forex card, you are not required to enter your TCS details (if applicable). It is the responsibility of the bank or forex vendor who does the foreign remittance or currency exchange to upload TCS information. As these transactions are linked with one’s PAN card, the information gets automatically updated in Form 26AS of the ITR e-filing website.
So What is Form 26AS?
Form 26AS also known as the Tax Credit Statement, reflects the various tax information linked to the PAN card of a taxpayer in a specific year. Issued by the Income Tax department, this form is automatically filled in based on the taxpayer’s transactions.
Therefore, as a taxpayer, you can check whether your TCS details are accurately entered by checking Form 26AS. If you have found any discrepancies, you can report the issue to your bank or forex service provider.
This is how you can verify your reported TCS payments in Form26AS:
- Login to your Income Tax Portal
2. Select the ‘e-file’ section on the tab, go to ‘Income Tax Return’ and click ‘View Form 26AS’.
3. Once you land on the ‘View Form 26AS’ page of the redirected TRACES website, select the assessment year and opt for HTML mode for the ‘view as’ category. Further, click the ‘view/download’ button.
4. The Form 26AS shall appear below. Now, scroll down to ‘Part-VI-Details of Tax Collected at Source’ and verify the TCS charged to you.
How to Claim TCS Refund or Deduction?
To claim a TCS refund, one must file an Income Tax Return. After making sure that your TCS information is accurately recorded in Form 26AS, you can go ahead with your ITR filing. Your TCS paid shall be automatically added to your tax liability and computed accordingly. As per the computer calculation and verification by authorities, you shall be allowed a complete or partial TCS refund or a deduction in the income tax payable.
Here are the steps for filing ITR to get a TCS refund;
- Access your account by logging into the official Income Tax Portal.
2. Once logged in, go to the ‘e-file’ tab, select ‘Income Tax Return,’ and click ‘File Income Tax Return.’
3. Choose the appropriate assessment year and mode of filing as ‘Online’. Then, click ‘Start New Filing.’
4. Select the applicable filing status, such as ‘Individual,’ ‘HUF’ (Hindu Undivided Family), or ‘Others,’ based on your eligibility.
5. Opt for the correct Income Tax Return (ITR) form suited to your tax profile.
6. Respond to the system-generated questions to assist in determining the relevant sections for your tax filing.
7. Verify and update details related to personal information, gross total income, and deductions claimed.
8. Open the ‘Tax Paid’ section and review the details for the TCS. If necessary, click ‘Edit’ to correct the tax collection year or add any additional TCS liabilities by selecting ‘Add Another.’
9. Review the return summary, which includes your TCS refund or deductions, to ensure accuracy before proceeding.
10. Choose a verification method to finalise and submit your Income Tax Return. Once the verification is complete, any due TCS refund will be processed and credited to your PAN-linked bank account or you will be allotted a deduction.
When Can I Claim a TCS Refund?
A taxpayer can claim their TCS refund or deduction from income tax payable only while filing their ITR. Remember to file ITR regularly, before 31 July of every financial, year to skip any penalty.
Who is Eligible for a TCS Refund or Deduction?
A taxpayer who files their income tax return may receive a refund or a deduction of TCS. However, it depends on the following conditions:
- If your income is below the taxable annual limit (INR 5 lakhs), you are not liable to pay the income tax. Therefore, the Income Tax department shall fully refund your TCS paid.
- If your income is above the taxable annual limit, you must pay income tax. However, if the TCS paid exceeds the total tax payable, the excess TCS amount, will be refunded after deducting the income tax.
- If your income is above the taxable annual limit, and the ITR filed is more than the TCS charges, you can claim an ITR liability deduction based on the TCS paid.
How to Check TCS Refund Status?
The tax department starts processing refunds after the taxpayer e-verifies their return. Typically, it takes 4-5 weeks for the refund to be credited to the taxpayer’s account. If the refund doesn’t arrive within this time, the taxpayer should check their email for notifications from the tax department, and verify the refund status on the e-filing platform as per the provided process;2
- Visit the income tax e-filing portal and log in with your user ID and password.
2. Select the ‘e-File’ tab, move to ‘Income Tax Returns’ and click ‘View Filed Returns’.
3. On the ‘View Filed Returns’ page, you can access a record of all your ITR filings to date. To proceed, select the desired financial year and click on ‘View Details’ for further information.
4. You can view your refund issue status along with the necessary dates.
Also Read: How Much Money Can You Send Abroad from India Without Tax?
Ann Mariya Job is the Associate Content Writer at ExTravelMoney.com. Holding a Bachelor’s in Journalism, she excels in creating deeply researched, engaging, and crisp content. Her work helps readers understand the complexities of foreign exchange, overseas money transfers, and international travel.