|. Overseas spending using credit cards not to attract TCS All Rights Reserved. Ministry of Finance on Twitter: "RT @IncomeTaxIndia: CBDT issues The rule is aimed at preventing tax evasion and improving tax compliance. Increase in TCS for traveling abroad | Tripclap Firstly, it has been decided that there will be no change in the rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to Rs. Generally, it refers to packages that combine flights and accommodation, or accommodation and sightseeing, or accommodation and meals, or any mix of these. Scrapping TCS on sale of overseas tour packages to foreign tour Download The Economic Times News App to get Daily Market Updates & Live Business News. (b) (Pkg Cost + GST) = Total Pkg Cost + TCS on 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. 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. Is this correct? This report is auto-generated from PTI news service. To avoid crossing the Rs 7 lakh threshold, individuals can split their bookings into separate transactions. Experience Your Economic Times Newspaper, The Digital Way! 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? Dont miss out on ET Prime stories! EWay Bill Application | IRIS Topaz Quicko on Twitter: "Here's the first significant change: There will be 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. 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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. One potential loophole lies in using your international credit card to make a purchase from a foreign tour operator. Will PAN-Aadhaar linking deadline be extended? Some individuals are exploring alternative payment methods to avoid paying TCS. 1) Use the Rs 7 lakh limit of international debit or credit card As you can see, you have to bear the cost of a hefty amount of TCS if you book your foreign trip through domestic travel agents or online portals. The Government has now announced a threshold limit of Rs. If parents want to send money to their children who are studying overseas, they must pay 5% TCS on transfers over Rs. "If this is so, then even if not a full relief this is partial relief for our travel agents on retaining their competitiveness somewhat against global players," she said in a statement. As an investment: Bank Account, Shares, Debt Instrument, Immovable Property etc. 29 Jun 2023 13:48:17 TCS on Sale of Overseas Tour Package - CAclubindia 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. Good News! Increased TCS rates to apply from October 1, 2023 As the TCS rate increases to 20% for most overseas transactions, including foreign tour packages, it is crucial for Indian travelers to be aware of potential ways to minimize its impact. 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. Therefore, it is possible to avoid TCS by making payments in Indian Rupees on foreign websites. Any expenditure beyond this limit will be . 3 ways to avoid the 20% TCS on overseas tour packages effective July 1 7 lakh per individual per annum. When booking an overseas tour package with an Indian tour operator or online travel aggregator, a 20% TCS will be levied on the total package cost. tcs on overseas trips: You have to pay more for foreign tour packages #GSToon 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 . 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. Further, Iyer said, "We appreciate the government's initiative that will help create a level playing field - taking on board inputs from relevant stakeholders, including travel and authorised foreign exchange players. Travelers also can book flights, accommodation, sightseeing packages separately, instead of buying one tour package. The following sellers are required to collect TCS: Central Government 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. FAQ powered by IRISGST The new rates will come into effect from October 1. Bhavika is Customer Success Manager for IRISGST at IRIS Business. How do we charge the TCS Starting from July 1, 2023, a tax collected at sources (TCS) of 20 per cent will apply to overseas tour packages. These two changes were not applicable when the remittance is for education or medical purpose. Currently, domestic tour operators are required to collect 5 per cent tax collected at source (TCS) on sale of overseas tour packages. 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). The government on Wednesday dropped plans to levy tax collected at source (TCS) on overseas payments made through international credit cards and said such expenses will be included in the Liberalised Remittance Scheme (LRS) of the RBI. 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. 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There will be no TCS on expenditures under LRS under clause (i) of Sub-section (1G) for the first Rs. 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. Here are the 3 ways to avoid 20% TCS during your next international trip. ICICI Bank | Saral GST The Government had notified Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 vide an e-gazette notification dated 16th May 2023 to remove the differential treatment for credit cards vis vis other modes of drawal of foreign exchange under LRS. 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. We work pro-actively to provide an incredible experience in every single trip we create, so you can have memories worth taking home. About IRIS Business Any remittance that has already had tax deducted at source (TDS) is also eligible for a refund. As long as the parents can demonstrate that the money is being sent for educational purposes. Experience Your Economic Times Newspaper, The Digital Way! 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 . GST API | IRIS Zircon, Blog (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed. Increased TCS rates to apply from October 1, 2023, Low annuity returns? Foreign trip booking: Credit card users may soon have to pay 20% TCS on Tax collection at source, or TCS, is a provision of the Indian Income Tax Act. Income Tax India on Twitter: "CBDT issues Circular No. 10/2023 dated 30 The section will be effective from October 1, 2020. With this sharp rise in TCS, foreign trips are likely to become costly sooner. Copyright TaxGuru. Overseas credit card spending will not face tax collected at source (TCS) as it will not be counted under the Liberalised Remittance Scheme (LRS), the finance ministry said on Wednesday. He further said, "if the government reduces the TCS percentage on overseas tour packages, a higher number of people will book through the Indian tour operators who are registered in India, instead of booking tours directly with the foreign tour operators or booking online tour operators who are not registered in India and are not liable to collect tax at source." Contact Us, Arteria 2. However, there are ways to book smartly and save money on your foreign tour packages. The new rates will come into effect from October 1. 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." As a result, TCS on remittances for booking overseas travel packages will rise from the existing 5 per cent to a whopping 20 per cent. "On behalf of the travel services industry, we welcome the government's announcement to defer the proposed increase in the TCS rate for remittances under LRS to October 1, 2023," Iyer said in a statement. TCS on Tour Packages. 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. 5% of the remittance amount 2. Thus, TCS, at the rate of 5% shall apply for the first Rs. 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