Record Forex Spending Despite TCS Introduction in FY24, ET TravelWorld

Foreign exchange remittances for the first 10 months of FY24 stood at USD 27.4 billion, crossing the FY23 level of USD 27.1 billion. This is despite the introduction of tax collection at source (TCS) in the Budget.

With average monthly remittances in FY24 touching USD 2.7 billion, the total foreign exchange sent abroad under the liberalised remittance scheme (LRS) is set to cross USD 30 billion during the current financial year, setting a new record.

Outward remittances rose during Jan 2024 to USD 2.6 billion from USD 2.4 billion in Dec, owing to a surge in spending on foreign education. Despite govt introducing TCS from Oct 2023, forex spending is increasing to earlier levels. For instance, the Jan forex spending by Indians was 3.5 per cent lower than the USD 2.7 billion in Jan 2023, before the TCS imposition.

Within total forex remittances, spending on travel in Jan at USD 1.54 billion was unchanged compared to Dec 2023. The figure was, however, higher than USD 1.49 billion in the year-ago period. Dealers said the Jan travel was also linked to students travelling overseas for education.