Some foreign websites offer options to their Indian customers to pay in Indian Rupees. The Finance Ministry has also deferred by three months the implementation of a higher Tax Collected at Source (TCS) rate of 20 per cent on expenditures made under LRS and overseas tour packages till September 30. FAQ powered by IRISGST The government has deferred hike in TCS on overseas tour packages till September 30, Credit card payment | Image credit: PIxabay, < Tour operators welcome government move to defer TCS hike on overseas packages. The salient features of the TCS applicability and TCS charging grid on Outward Remittances under LRS are given hereunder: S. No. Liberalised Remittance Scheme #LRS and Tax Collected at Source #TCS No change in rate of #TCS for all purposes under #LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to 7 lakh per individual per annum Show more . Whenever you are buying an foreign tour package from a travel agent, i have to pay a fiscal collection at input (TCS) off 20% from July 1, 2023. If you are purchasing an overseas tour package from a travel agent, you have to pay a TCS of 20 per cent from July 1, 2023. The proposal to come up with FAQs to provide clarification on practical difficulties is a much sought after requirement.. Is this correct? Important changes w.r.t Liberalised Remittance Scheme (LRS) and Tax Collected at Source (TCS) No change in rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to Rs. This TCS could be adjusted against the final tax liability of the person while filing annual income tax return. We work pro-actively to provide an incredible experience in every single trip we create, so you can have memories worth taking home. Tour operators welcome govt move to defer hike in TCS on overseas packages However, certain transactions related to education and medical purposes are exempted from . However, with the implementation of a 20% Tax Collected at Source (TCS) on overseas tour packages starting from July 1, 2023, there is concern among travelers. 3 ways to avoid the 20% TCS on overseas tour packages effective July 1 They are asking their friends or relatives living abroad to make the payment for their tour package and then reimbursing the amount in their Indian bank accounts. At present, if you book a foreign tour package, you have to pay a. Domestic tour operators on Thursday welcomed the government's move to defer hike in tax collection at source on overseas tour packages till September 30, calling for it to be brought down to 2.5 per cent. There are two options: booking through an Indian travel agent with a domestic payment or utilising an international travel website with an international credit card. E-Invoicing Solution | IRIS Onyx, About IRIS IRP 7 lakh. Additionally, purchasing foreign currency individually from an authorized dealer for your foreign trip also attracts a 20% TCS. Moneycontrol.com | Easybiz However, it remains to be seen how credit card companies will handle this situation to avoid government scrutiny. The buyer of a tour package may not be a taxpayer in the year in which he buys it. This approach could provide substantial savings, especially for middle-class families, by avoiding the complex and time-consuming process of claiming a tax refund. Required fields are marked *. Category Earlier, domestic travel agents had pointed out that they were disadvantaged against overseas service providers even after the government's clarification that it did not intend to levy TCS on small transactions and that payments made by individuals using their international debit or credit cards up to Rs 7 lakh for foreign travel per financial year will be excluded from LRS limits. Pay 20% TCS from July 1 if you don't do this, Tax on Overseas Credit Card Spends Held Back, Sebi Board OKs Stricter Disclosure Rules for FPIs, GQG Partners, Others Invest $1b in Two Adani Cos. Will PPF interest rate increase for Jul-Sep quarter? 3 ways to avoid the 20% TCS on overseas tour packages effective July 1 Dont miss out on ET Prime stories! Reduction of 25% is not applicable on TCS on tour packages as per press release by ministry of finance. Join Membership and Get Exclusive Videos and Posts for Members only https://www.youtube.com/channel/UCDy5n4YEOg6daXPT-P-eESA/join#TravelAgent #foreignTour #SendmoneyOutsideIndiaAmendment of section 206C.. 17, Rosewood, First Floor, Malibu Towne, Sector 47, Gurugram, Haryana - 122018, Follow us on different social media platforms, If you're planning to purchase an overseas tour package from a travel agent, there's a new development that you should be aware of. Adani Group on Wednesday sold shares in listed companies Adani Enterprises and Adani Green Energy in an open market transaction to raise 8,372 crore ($1 billion). 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Tax Collected at Source (TCS) is a mechanism implemented by the Indian government to ensure tax compliance. 2. Download Financial Express App for latest business news. TCS on Sale of Overseas Tour Package - CAclubindia 10/2023 dated 30/06/2023 containing Frequently Asked Questions (FAQs) for removal of difficulty on issues pertaining to TCS on LRS and purchase of overseas tour program package. How is the same accounted in the PAN of the actual travellers. But, if you book a tour package offered by international . If you are buying a foreign tour package from a travel agent, you have "Though we are happy with this rollback, our long-standing demand is that the TCS should be reduced to 2.5 per cent as the main objective of the government is to bring more people into the tax net," IATO President Rajiv Mehra said. If the buyer is liable to deduct tax TDS under any other provision of this Act and has deducted such amount; The Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority etc. However, the term 'Overseas Tour Package' is not well-defined in the law, leading to some ambiguity. However, Mayal added, "I think the government needs to consider the compliance deliverables on the agents. Thus, TCS, at the rate of 5% shall apply for the first Rs. For the purchase of an overseas tour programme package, the TCS shall continue to apply at the rate of 5 per cent for the first Rs 7 lakhs per individual per annum; the 20 per cent rate will only apply for expenditure above this limit, the ministry added. E-books . The holiday season is here, and many people in India are eager to book their dream foreign trips. Explainer: How the TCS rule on outbound travel is a lose-lose situation In this case, TCS won't apply for transactions up to a limit of Rs 7 lakh per year, as the TCS would be levied by the credit card company. Any expenditure beyond this limit will be . During leisure time, she loves traveling and likes to explore new places. Jun 29, 2023, Updated Jun 29, 2023, 3:40 PM IST. In such cases he has necessarily to apply for refund of the TCS as there will be no tax to adjust the TCS. Good News! No TCS On Overseas Credit Card Spending TCS Rate chart: What are the applicable TCS rates for FY - CAclubindia Ways to Avoid TCS on Foreign Tour Packages: A Guide for - CAclubindia LRS is governed by RBI Regulations. As an expense outgo: Travel Expenses, Donations, Study Expenses, Medical Expenses, Gift to Non-Resident Relatives etc. On the clarification regarding the threshold of Rs 7 lakh per individual per financial year across all modes of payment regardless of purpose, he said it "will go a long way in aiding the buoyancy being witnessed in the travel industry, which is still recovering from two consecutive years of the impact of the global pandemic." ICICI Prudential Large & Mid Cap Fund Direct Pla.. Foreign trip booking: Credit card users may soon have to pay 20% TCS on forex transactions, Starting from July 1, 2023, you will have to shell out more to book. Download The Economic Times News App to get Daily Market Updates & Live Business News. Rajesh Sawhney on Twitter: "RT @FinMinIndia: Important changes w.r Earlier, Thomas Cook (India) Ltd Executive Director & CEO Mahesh Iyer said the government's decision to defer increase in the tax collected at source to 20 per cent on expenditures made under the liberalised remittance scheme will help create a level playing field through discussion and inputs from relevant stakeholders. Different ways you can avoid the 20% TCS on overseas tour packages Get live Share Market updates and latest India News and business news on Financial Express. Please share correct information. The Budget 2023-24 had raised TCS rates on LRS and foreign tour packages from 5 per cent to 20 per cent, effective July 1. the total Pkg Cost, Will TCS apply if online fund trf made from his Indian SB acct to his UK account, A UK citizen working in an Indian Company for more than 3 years and he is a resident under income tax. Will PAN-Aadhaar linking deadline be extended? However, booking only flights independently and paying in Indian Rupees is unlikely to attract TCS. Litigation management software | IRIS LMS, MCA Struck-Off Company Search | IRIS LookUp, Changes in TCS on Overseas Travel Packages, new changes in Tax Collected at Source (TCS), GST Data for Credit Evaluation & Monitoring | IRIS Credixo. No TCS shall be collected, if the amount being remitted by buyer is less than 7 Lakh in a financial year. This report is auto-generated from PTI news service. 28 Jun 2023 22:54:23 It is worth noting that the new tax on foreign tour packages will be applicable to both leisure and business travel. Fed Chief Powell latest warning to the stock market investors, Canada Visa from India: All you need to know as a student, tourist or business traveller, CBDT releases FAQs on tax collection at source (TCS) on foreign remittance, effective October 1, 2023, Copyright 2023 The Indian Express [P] Ltd. All Rights Reserved, Good News! Industry lauds Centre's move to withdraw TCS on overseas tour package The new rates will come into effect from October 1. Winsoft, New Changes in TCS on Overseas Travel Packages, 2022 IRIS Business Services Ltd. All Rights Reserved. The TCS collected can be claimed as a tax credit when filing income tax returns. Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Tax collection at source, or TCS, is a provision of the Indian Income Tax Act. However, it is important to be aware of the new tax and factor in the additional cost when planning your trip. 3 ways to avoid the 20% TCS on overseas tour packages effective July 1 In both cases, TCS is generally applicable. (business) Recently, the government has made new changes to the TCS laws in the overseas travel arena. New TCS rule on overseas tour packages - The Economic Times Which sellers are required to Collect Tax at Source? PTI JD BAL BAL. Ways to Avoid TCS on Foreign Tour Packages: A Guide for Indian Travelers, Big Change for Consultants and Professionals: CBDT's New Form 10-IEA Enables Old Tax Regime Choice, GST department issues show-cause notices to several insurers in India. Starting from July 1, 2023, a tax collected at sources (TCS) of 20 per cent will apply to overseas tour packages. Grant Thornton Tour operators welcome government move to defer TCS hike on overseas Here are five points to note related to changes in TCS on international travel packages: Beginning July 1, 2023, a 20% TCS on an overseas tour package purchased through a travel agent will be necessary. tcs on overseas trips: You have to pay more for foreign tour packages Rashmi (a) Only the package Cost (excluding GST) As an investment: Bank Account, Shares, Debt Instrument, Immovable Property etc. The government on Wednesday proposed to hike the TCS rate to 20 per cent from 5 per cent currently on overseas tour packages and a liberalized remittance scheme for remittance of funds out. However, it is essential to stay updated on any changes in government regulations and consult with tax professionals for personalized advice. One potential loophole lies in using your international credit card to make a purchase from a foreign tour operator. Domestic tour operators on Thursday welcomed the government's move to defer hike in tax collection at source on overseas tour packages till September 30, calling for it to be brought down to 2.5 per cent. The new rates will come into effect from October 1. Heres what you can do, 5ITR filing: Three changes in income tax return forms for FY 2022-23 (AY2023-24), Choose your reason below and click on the Report button. For example, they can book flights and accommodation separately and use multiple credit cards for each booking. click here! 7 lakh, irrespective of purpose. If parents want to send money to their children who are studying overseas, they must pay 5% TCS on transfers over Rs. 0.50% if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education, 10%, in case no PAN of such person is available. It was also announced in March that credit card payments would be brought under the LRS. The increase of TCS rates on LRS for purposes other than for education and medical treatment had been concerning taxpayers ever since the Finance Bill 2023 was tabled. Some individuals are exploring alternative payment methods to avoid paying TCS. Experience Your Economic Times Newspaper, The Digital Way! Industry lauds Centre's move to withdraw TCS on overseas tour package | Mint Special Offer! Currently, domestic tour operators are required to collect 5 per cent tax collected at source (TCS) on sale of overseas tour packages. TCS deducted under which PAN Pharma Co. or Actual Traveler ?? However, if all the three persons want to make payments separately or want their tour package bill separately, TCS could be collected from . Budget 2023 shall hiked the TCS rate for fore remittances under the LRS from 5% to 20% (except for education and medical purposes). LRS other than Overseas Tour Programme 5% of the remittance Annual GST Return Filing Experience Your Economic Times Newspaper, The Digital Way! By booking smartly and taking advantage of early bird discounts, package deals, and credit card rewards, travelers can save money on their foreign tour packages, In conclusion, applying for TCS after a foreign tour is a straightforward process that requires you. Ans: If the Buyer of the Overseas Tour Programme Package quotes Permanent Account Number (PAN) or Aadhar Card Number, TCS will be made @5%, or else @10%. Your email address will not be published. This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp. Budget 2023 has hiked the TCS rate for foreign remittances under the LRS from 5% to 20% (except for education and medical purposes). Increased TCS rates to apply from 1st October, 2023 1How is income from self-occupied house property calculated? We do not accept any liabilities whatsoever for any losses caused directly or indirectly by the use/reliance of any information contained in this video or for any conclusion of the information. Earlier, domestic travel agents had pointed out that they were disadvantaged against overseas service providers even after the government's clarification that it did not intend to levy TCS on small transactions and that payments made by individuals using their international debit or credit cards up to Rs 7 lakh for foreign travel per financial year will be excluded from LRS limits. According to changes brought about in the Finance Act 2023, buying an overseas tour package from an Indian tour operator will attract 20 percent TCS from July 1. However, there are potential ways to escape the TCS or minimize its impact. The board of the Securities and Exchange Board of India on Wednesday approved tighter disclosure rules for foreign portfolio investors (FPIs), to curb misuse of overseas investment routes and prevent violation of public shareholding regulations. If only one person makes the payment, he may be treated as buyer and would be subject to TCS alone. The finance bill 2020 had proposed an amendment to section 206C and levied 5 per cent TCS on overseas remittance and on sale of overseas tour packages. Today in this video we shall be discussing TCS on Overseas Tour Package | New RBI Rules for International Credit Card Uses Limit \u0026 TCSWe shall also be covering the following topics:section 206c(1g)(b) tcs on selling of overseas tour package,tcs under income tax on sale of overseas tour package,tcs on foreign remittance and selling of overseas tour package,how to pay tcs on overseas tour package,tcs on overseas tour package faq,nature of payment for tcs on overseas tour package,tcs on overseas tour package budget 2023,tcs on sale of overseas tour package,how to pay tcs on foreign tour packagesHope you have liked the video where we tried our best to explain the concept in an easy language for you to understand. The new provisions regarding TCS on overseas tour packages requires that a seller of overseas tour package shall collect TCS at the rate of 5 per cent or 10 per cent (if PAN /Aadhaar is not available) on total amount from the purchaser at the time of receiving the payment for the tour package and includes expenses for travel or hotel stay or boa. Finance Act 2020 has inserted a new sub-section (1G) in TCS (Tax Collected at Source) under Section 206C of the Income Tax Act, 1961 to collect tax out of foreign remittance transactions underLiberalized Remittance Scheme (LRS) as well as amount received from buyer by a seller of an overseas tour program package. The agents do not have so much back office support.". For those investing in global stocks or international real estate, this is good news as now they get more time to save on tax outgo. Indian Equity Schemes Vs Global Emerging Market Funds: Where to invest? Increased TCS rates to apply from October 1, 2023, Low annuity returns? Today in this video we shall be discussing TCS on Overseas Tour Package | New RBI Rules for International Credit Card Uses Limit & TCSWe shall also be coveri. Quicko on Twitter: "Here's the first significant change: There will be Contact Us, Arteria *Overseas Tour Programme (payment for purchasing ticket, booking Hotel, etc.) The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. 10/2023 dated 30/06/2023 containing Frequently Asked Questions (FAQs) for removal of difficulty on issues pertaining to TCS on LRS and purchase of overseas tour program package. In the Budget this year, certain changes were announced to the system of Tax Collection at Source (TCS) on payments under the Liberalised Remittance Scheme (LRS) and on overseas tour program packages. 7 lakh per individual per annum. Bank or tour operator He might buy the tour package from his savings. Previously, the TCS rate for overseas tour packages was 5%, but it has now been increased to 20% for most transactions, effective from July 1, 2023. How to Avoid 20% TCS on Overseas Tour Packages Starting July 1 If you are planning to take an international trip soon, you must understand this new rule and how you can use it in the most efficient way to save your hard-earned money. GST Compliance Calendar, GST Reconciliation The government will issue the circular and Frequently Asked Questions (FAQs) to clarify various practical issues in implementing this provision. #GSToon "Though we are happy with this rollback, our long-standing demand is that the TCS should be reduced to 2.5 per cent as the main objective of the government is to bring more people into the tax net," IATO President Rajiv Mehra said. Softlink The press release, while providing timeline extension till September 30, 2023, also clarifies that transactions done through international credit cards while being overseas would not be counted as LRS transactions and hence not subject to TCS. Will TCS apply if he transfers from normal Indian bank to his own foreign bank in UK, Your email address will not be published. Any remittance that has already had tax deducted at source (TDS) is also eligible for a refund. By keeping the transaction amounts below Rs 7 lakh, individuals can potentially bypass the TCS. In Budget 2023, the percentage of tax deducted at source (TCS) for international transfers made under LRS increased from 5% to 20%. RT @FinMinIndia: Important changes w.r.t. (Your legal guide on estate planning, inheritance, will and more.). On July 1st, 2023, The new regulation was supposed to come into effect from 1st July, 2023 which has now been postponed to October 1, 2023. TCS on foreign remittances: There will be no tax collection at source (TCS) on foreign remittances of up to Rs 7 lakh per financial year, said Ministry of Finance. Foreign trip booking: Credit card users may soon have to pay 20% TCS on Getty Images Scrapping TCS on sale of overseas tour packages to foreign tour With this sharp rise in TCS, foreign trips are likely to become costly sooner. Iyer said as India's leading foreign exchange provider, Thomas Cook (India) believes that "this positive announcement also brings in much-needed clarity with Prepaid Forex cards (the preferred mode of transactions for overseas travellers) now being treated on par with credit/debit cards." TCS on LRS Remittance & Overseas Tour Packages - Tax Guru See Zee Business Live TV Streaming Below: The Income Tax Act provides for collection of tax by a seller of an overseas tour package from a buyer at 5 per cent of the amount of the package. These amendments were to take effect from 1st July 2023. Good News! Increased TCS rates to apply from October 1, 2023 ), First Published: Jun 29 2023 | 5:10 PM IST, PM holds Covid meeting amid renewed concerns, says 'pandemic far from over', Serum Institute tops profit charts among unlisted firms amid Covid war, Personal finance 101 from an industry veteran, Introduce personal finance lessons in college: BJP MP in Parliament, Meta now allows Quest users to tap, swipe in VR without controllers, Meta to acquire VR startup 'Within' after favourable court ruling, Himanta Biswa Sarma launches Mission Lifestyle for Environment in Assam, Serious failure of Jharkhand to prevent environmental lawlessness, says NGT. 1) Use the Rs 7 lakh limit of international debit or credit card. While thee are buying a foreign tour package from an go agent, you have to pay a tax collection at input (TCS) starting 20% from July 1, 2023. These remittances can be towards following specified purposes: Below are the specific details of the same: Do i need to pay tcs if i as an individual book a hotel of foreign country from online portals like mmt.? ICICI Prudential India Opportunities Fund-IDCW. Also, it simplifies the overall TCS framework under LRS by restoring it back to earlier limits ie 0.5 percent on education financed by loan beyond 7 lakhs and 5 percent on medical treatment/ education (other than financed by loan). TCS is not an additional fee. Prior to acting upon this video, you're suggested to seek the advice of your financial, legal, tax or professional advisors as to the risks involved may be obtained and necessary due diligence, etc may be done at your end. Income Tax India on Twitter: "CBDT issues Circular No. 10/2023 dated 30 Here are five points to note related to changes in TCS on international travel packages: In conclusion, the new changes in Tax Collected at Source (TCS) on overseas travel packages in India have significant implications for both customers and travel companies. The majority of these transactions are commercial or trading-related. tcs on overseas trips: You have to pay more for foreign tour packages TCS of 20% must be paid even if you purchase foreign currency separately from an authorized dealer for international travel. 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