Important Financial Changes in India Effective October 2023- Impact on Businesses ( October 1, 2023 )

From October 2023, India is set to undergo significant financial changes that will impact businesses and individuals alike. These include revised Tax Collected at Source (TCS) rules affecting expenditures, new options for selecting debit and credit card networks, the elimination of perpetual Systematic Investment Plans (SIPs), and an extended deadline for exchanging or depositing 2,000 rupee notes.

Staying informed about these developments is crucial for effective financial planning and compliance. This article provides an overview of these changes and their implications for the Indian financial landscape. 

TCS rule modification from October 1, 2023

• Commencing on October 1, 2023, the revised Tax Collected at Source (TCS) rates will come into effect, necessitating attention from businesses. TCS will be applicable if expenditure surpasses a specific threshold during a fiscal year, regardless of the nature of the transaction—be it a foreign trip, international remittances, investments in foreign assets, mutual funds or cryptocurrencies, or educational expenses abroad.
• Under the Reserve Bank of India’s (RBI) Liberalized Remittance Scheme (LRS), individuals can send up to US$250,000 annually. However, from October 1, 2023, a TCS of 20 percent will be imposed on international remittances exceeding INR 700,000 (US$8430.18) within a fiscal year, excluding medical and educational expenses.

For more information, read our detailed analysis here: Taxation of India’s Outbound Remittances: LRS Scheme and Increased Tax Rate from October 1.