The A2 form and the TCS is applicable if you choose to transfer your funds with one of our Domestic options in India (INR transfer). These are necessary for all international transfers out of India.
When you choose a Domestic payment option you will transfer your funds to a local bank, but they will have to reach your European blocked account as part of the process. Our payment partner, Cohort Go, will handle the international part of the transfer, which is why they need you to provide the A2 form and settle the TCS when transferring your funds.
TCS (Tax collected at Source) is effective as of 01 October 2020. It has been introduced on international remittance under the Liberalised Remittance Scheme (LRS) for payments over INR 7 lakh in a financial year. The financial year runs from April 1st to March 31st every year.
The purpose of International Education payments also come under the LRS scheme and therefore TCS is applicable in case the INR value exceeds 700,000 in aggregate in the given financial year.
For educational purposes the TCS will be calculated based on the source of the funds and please also note:
- If the source of funds is your own funds (Resident Savings), TCS is calculated at 5% above the 7 lakh threshold in the given financial year.
- If the source of your funds is an Education Loan from a bank or financial institution, as defined in section 80E, TCS is calculated at 0.5% over the 7 lakh threshold amount.
THE A2 FORM
This is a requirement set by the Reserve Bank of India, which is the apex bank of India. The purpose of this document is to declare the total amount transferred abroad from the remitter bank account in the given financial year. The financial year runs from April 1st to March 31st every year.
The A2 form you download from your Expatrio portal is pre-filled with the information you provide when setting up your payment process on your Expatrio portal. Because of this, usually all you will need to do is get the A2 form signed and upload it on your Expatrio portal.
Who should sign the A2 form?
We ask for the payer's details and these are added to your A2 form. However, please note the following:
- If you say on the form that you will transfer from an account under your name you will be considered the payer and you will have to sign the A2 form yourself.
- If you say the funds will be transferred from someone else's bank account they will be considered the payer and they will have to sign the A2 form before you upload it on your Expatrio portal.
What should you add to the A2 form?
As said before the A2 form is already pre-filled with the information you provide when setting up your payment process. However, there may be three sections where you may have doubts when adding more information. These sections are:
- Account Number in Section-I (Details of applicant)
Though not mandatory, the payer can fill his/her account number from which the INR amount is transferred.
- Section VI (Details of the remittances made/transactions effected under the Scheme in the current financial year of April to March) ..…
You will need to confirm the total INR amount transferred in the given financial year on the Expatrio portal, and provide the details of these transactions in this section. All international remittances under the LRS (Liberalised Remittance Scheme) has to be considered here. In section VI of the A2 form, the payer needs to fill the details of the declared transactions done in the current financial year. Please note that the financial year runs from April 1st to March 31st.
- Certificate by the Authorised Dealer
You can leave this part as it is. The Authorised Dealer partner of Cohort Go will take care of this part of the A2 form.
Below is a sample A2 form with useful information: