1. INTRODUCTION
Now foreign trip is also taxable. Govt. is taking step towards increasing tax base. Before Corona virus hampered our life, UN World Tourism Organization (UNWTO) predicted that India will account for 50 million outbound tourists by 2020. Operators said that at present around 25 million tourists from India travel abroad — this basically implies that the number would double from current levels within the next two years. Around a decade back, eight million Indians were travelling overseas. The numbers of foreign travels were increasing before Covid-19 but only 1% of population files return of income. Looking the numbers hinting tax evasions Govt. has imposed responsibility on Seller to collect TCS from person who buys Overseas Tour Package.
2. WHAT IS OVERSEAS TOUR PROGRAMME PACKAGE?
It means any tour package which offers visit to a country or countries or territory or territories outside India and includes expenses for travel or hotel stay or boarding or lodging or any other expense of similar nature or in relation thereto.
3. WHO IS REQUIRED TO COLLECT TCS?
Tax shall be collected by seller of an overseas tour programme package.
4. WHAT IS THE RATE OF TCS?
- Tax shall be collected by seller of an overseas tour programme package @ 5% if buyer has furnished his PAN, otherwise tax shall be collected @ 10% in accordance with section 206CC.
- Rates shall be increased by applicable surcharge and health and education cess if buyer is a non-resident person or a foreign company.
- In this case rates have not been reduced due to Covid-19.
5. WHAT IS THE AMOUNT ON WHICH TAX SHALL BE COLLECTED?
Tax shall be collected on the total amount a seller receives from buyer for the overseas tour programme package.
6. IN WHICH CASES TCS SHALL NOT BE COLLECTED?
- If buyer is Government.
- If tax has been deducted under any other provisions of the Act.
7. OTHER MEASURES TAKEN BY GOVT
- From April 2019 ITR filing mandatory if any person spend more than 2 lakhs on Foreign travel.
- is thinking to include foreign travel in Statement of Financial Transaction as a result of which expenditure on foreign travel shall be reflected in Form-26AS.
8. OUR COMMENTS
There is huge population traveling in foreign countries and not filing return of income. This is bold move taken by Govt. to regulate all the non-tax payers. The Govt. is building base to widen its tax payers and in years to come things are going to change in drastic manner.
Author Bio
Let’s say I made a booking with a travel agency on 28th March 2022 and travelled on 15th April 2022. Which FY will this deduction reflect?
if i expensed for Foreign trip and TCS has been collected by the operator and the same is shown in the 26AS did i had to treat that expense as income if so under which head?
Dear ,
If my Tour package 1.2 Lakh – 2.0 lakh , do i need to pay GST And TCS 5% .
What is the section under which TCS on foreign travel(Foreign tour package and not the foreign remittance) to be deposited in challan 281
Section 206C(1G) and Collection Code for the same is alphabet “O”.
What is the code under which TCS on foreign travel to be deposited ?
Also when is it to be deposited ?
Like TDS before 7th of next month or the same month
Section 206C(1G) and Collection Code is Alphabet “O” also due date for deposit that TCS is upto 7th day from the end on the month in which TCS is collected, i.e. 7th Day of next month in your words.
Who will deduct TDS in case of A Ltd a tour operating company is selling package to B who is an agent and B is selling that package to C a traveler???