In recent years, startups such as airpay, Vested and INDmoney have become popular owing to their simple interface which allows Indian users to easily invest in foreign securities or remit funds abroad.On Jan. 23, the Reserve Bank of India announced restrictions on SBM Bank India, stopping it from using the LRS route to provide services clients of startups mentioned above. The regulator did ease the restrictions a week later, allowing physical merchant transactions and ATM withdrawals under the LRS scheme. “When it comes to investing abroad through the LRS, which some investors do to diversify their portfolios, they’ll likely have to treat this as a necessary requirement,” said Arvind Rao, founder, Arvind Rao & Associates. “But they should bear in mind that there is an opportunity cost because of the significant tax collected at source, which will not earn a return.” If you are discouraged from investing abroad, you are also not encouraged to spend either. The new 20% TCS rule applies to tour packages as well. Earlier, the TCS was 5% without any threshold. A senior official at a company offering tour package said this will mean a big hit. A holiday package worth Rs 1 lakh today attracts 5% goods and services tax and a 5% TCS, making it Rs 1.1 lakh selling price. In the new structure, a package will cost Rs 1 lakh, loaded with Rs 5,000 GST and Rs 20,000 TCS. Although TCS is refundable, the official said.”While it may be possible for some individuals to adjust for the TCS in the form of reduced advance tax payments, for a salaried person, who may not have a significant amount on which to pay advance tax , this is not feasible,” Rao said.