Can we claim credit for the 20% TCS?

Yes! The tax paid should not be confused as an additional cost or tax on the fund transfer. The TCS paid can be claimed as a credit against tax payable when filing income tax returns. If the TCS is higher than your tax payable, you will receive a refund. 

Let’s look at a quick example: a resident Indian individual wants to invest INR 10 lakh in US equities. According to the TCS rules, a tax of 20% will be applied on INR 3 lakh, which means a TCS of INR 60,000 would be collected and deposited with the government. For detailed information about claiming the credit please connect with your tax consultant.

Disclaimer: This article is for informational purposes only. None of the contents of this article should be treated as advice.