The Reserve Bank of India (RBI) started imposing a 20% Tax Collected at Source (TCS) on foreign investments since 2022, affecting individuals’ ability to invest in stocks like Tesla. This policy requires upfront payment of the TCS, which is returned in INR after 18 months, causing a loss due to currency depreciation. Investors feel frustrated as they are unable to invest their own money effectively, and the RBI’s actions are being compared to extortion.
However, there are ways to offset the TCS against salary or advance tax obligations. Salaried employees can adjust TCS payments against tax deducted at source (TDS) on their salaries, starting October 1. Additionally, there is an exemption of up to 7 lakhs annually. This information is essential for investors to make informed decisions and navigate the system effectively.
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