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TCS Provisions on LRS Remittances & Overseas Tour Packages effective 1st October 2020
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 under Liberalized Remittance Scheme (LRS) as well as amount received from buyer by a seller of an overseas tour program package. The section will be effective from October 1, 2020.
TCS on Liberalized Remittance Scheme:
LRS is governed by RBI Regulations. Under the RBI Regulations, Indian Residents can remit 250,000 USD per financial year outside India. These remittances can be towards following specified purposes:
- As an expense outgo: Travel Expenses, Donations, Study Expenses, Medical Expenses, Gift to Non-Resident Relatives etc
- As an investment: Bank Account, Shares, Debt Instrument, Immovable Property etc.
Below are the specific details of the same:
| Nature of Transaction | : | Remittance under Liberalized Remittance Scheme |
| Person Responsible for collection | : | An Authorized Dealer |
| From whom to collect | : | From buyer of Foreign Currency remitting outside India under LRS |
| Time of Collection | : | At the time of debiting the buyer or receipt from buyer, whichever is earlier |
| Rate of TCS | : |
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| Threshold Limit | : | No TCS shall be collected, if the amount being remitted by buyer is less than ₹ 7 Lakh in a financial year. |
| Exceptions | : | No TCS shall be collected if the buyer is
|
| Other Points | : |
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TCS on Overseas Tour Package:
| Nature of Transaction | : | Remittance for buying an Overseas Tour Package |
| Person Responsible for collection | : | Seller of Overseas Tour Package |
| From whom to collect | : | From buyer of Overseas Tour Package |
| Time of Collection | : | At the time of debiting the buyer or receipt from buyer, whichever is earlier |
| Rate of TCS | : |
|
| Threshold Limit | : | No threshold limit has been prescribed for collection of tax under this section. |
| Exceptions | : | No TCS shall be collected if the buyer is
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| Other Points | : |
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Author Bio
Do i need to pay tcs if i as an individual book a hotel of foreign country from online portals like mmt.?
Traveler Agent booked Overseas Tour Package for Pharma Company employee
Inv raised to Pharma Co.
TCS deducted under which PAN – Pharma Co. or Actual Traveler ??
Tour operator will collect TCS
But who will remit the TCS?
Bank or tour operator
How is the same accounted in the PAN of the actual travellers
Reduction of 25% is not applicable on TCS on tour packages as per press release by ministry of finance. Please share correct information.
The buyer of a tour package may not be a taxpayer in the year in which he buys it. He might buy the tour package from his savings. In such cases he has necessarily to apply for refund of the TCS as there will be no tax to adjust the TCS. Is this correct?
1. Will TCS be applicable if we book only hotel accommodation (not for leisure travel purpose) at an overseas destination wherein we are directly paying to the hotel by credit card
2. How do we charge the TCS
(a) Only the package Cost (excluding GST)
e.g. Pkg Cost + (TCS on pkg cost) + (GST on
pkg cost)
(b) (Pkg Cost + GST) = Total Pkg Cost + TCS on
the total Pkg Cost
Is this TCS applies on Forex cards too
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 TCS apply if he transfers from normal Indian bank to his own foreign bank in UK