Budget proposal on remittances abroad triggers fears of double taxation

5% to be paid on already taxed income

The Budget proposal to impose a new tax on remitting money abroad has triggered fears of double taxation.

In the Union Budget 2020, the government proposed that banks that received Rs 7 lakh and above from a person for remitting money overseas under the Reserve Bank of India’s (RBI’s) Liberalised Remittance Scheme (LRS) or from the seller of a tour package would debit 5 per cent of the remitted amount as tax.

But this money is taxed once as income-tax first.

The move will help the exchequer gather Rs 500-600 crore in advance every month, said government sources.

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