In the Union Budget, the liberalized money promotion scheme (LRS) has been proposed to increase the tax collection (TCS) limit from Rs 7 lakh to Rs 10 lakh. This is expected to increase tax compliance along with benefits from travel and foreign currency exchange areas.
While presenting the Union Budget of 2025-26, Finance Minister Nirmala Sitharaman said, “It has been proposed to increase the limit of TCS from 7 lakh to 10 lakh rupees from 7 lakhs to 10 lakh rupees to be collected on funding under the LRS scheme of the Reserve Bank. I also propose to abolish TCS on funds for the purpose of education, where such money is from a loan taken from a specified financial institution.
Experts say that effective changes from 1 April 2025 will promote travel and foreign exchange segment, as well as additional benefits to students and will also improve tax compliance.
Poonam Upadhyay, director at Crisil Ratings, said, ‘Under the Landalized Dhanashan Yojana of the Indian Reserve Bank of India, the limit of tax collection at the source in funds in funds will boost travel and foreign exchange segment by Rs 7 lakh to Rs 10 lakh. Students and people who get their treatment will also get benefit. The funds sent abroad under LRS in November 2024 have been around $ 1.95 billion. According to the LRS introduced in 2004, all migrant people, including the minor, are allowed to be sent to the current and capital account or both through the capital account or both.
Initially, the scheme limit was $ 25,000. Its limit has been increased from time to time. Partner in BDO India, FS Tax, Manoj Purohit said that by increasing the TCS limit from Rs 7 lakh to Rs 10 lakh on LRS, the basis of discount will increase and compliance will increase.