Tax on foreign remittance: Only 2 months left to save lakhs on money sent abroad

India’s finance minister has announced a steep tax increase on money sent abroad under the LRS, to go into effect on July 1, 2023. Instead of the current 5% tax, the new tax will be 20%. The rule will affect everyone who sends money abroad (excepting for educational and medical purposes), not just high-net-worth individuals. On the plus side, it can also be claimed back or settled against one’s tax liabilities, but refunds take time. One option for reducing the tax impact is to fast-track one’s overseas investments before July 1, while the 5% tax is still in effect.

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