This is not true. There's a TCS of 20%, which is an advance tax payment that you can claim back in your income tax returns at the end of the year, and it not an additional tax. This is just a (bad) mechanism to stop black money from leaving the country.

Thanks I didn't realize that it was refundable, I guess "India makes people loan 20% of their foreign remittances to the government interest-free" would be more accurate.

> "India makes people loan 20% of their foreign remittances to the government interest-free" would be more accurate.

It wouldn't. The TCS can be offset against other tax liabilities. The government pays out 6% interest on excess tax payments. For reference, 364 day T-bills are currently yielding ~5.5%.

The idea is to force reporting and add friction. Not raise revenue.