The Central Board of Direct Taxes (CBDT) has observed that many taxpayers have remitted significantly higher amounts to foreign countries compared to their declared income in tax returns for the years 2020-21 and prior.

There are questions about Tax Collected at Source (TCS) in the payments made by them, too. Keeping this in mind, the CBDT has instructed income tax officers to verify the data of Form 15CC. All Form 15CCs of these taxpayers after 2016 are being separated and verified. 

The board will compile a list of high-risk cases by analysing data starting from the 2020-21 financial year.

For this, the preparation of Standard Operating Procedures (SOPs) is also into consideration. By Sept 30, a list of high-risk taxpayers will be prepared after which notices will be issued to them. The process of issuing notices will be completed by Dec 31.

TCS rate will be increased to 20% from October 2023 for individuals sending more than ₹7 lakh abroad during the financial year. Those sending money abroad must pay 20% TCS to the government.

However, the government has excluded medical and educational expenses under the Liberalised Remittance Scheme (LRS).

Under LRS, resident individuals are permitted to remit up to $2,50,000 per financial year for eligible transactions. 

The CBDT has directed banks to report total foreign exchange expenditures as a distinct category, alongside total credit card expenditures, even if no TCS is being collected.

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