top of page

Budget 2023 : Changes to TCS Rates for Foreign Remittances and Tour Packages: What You Need to know

The Budget 2023 has proposed a significant increase in the Tax Collection at Source (TCS) for certain foreign remittances and sale of overseas tour packages. According to Section 206C of the Act, TCS is applicable for the business of trading in alcohol, liquor, forest produce, scrap, etc. Sub-section (1G) of the said section provides for TCS on foreign remittance through the Liberalised Remittance Scheme and on the sale of overseas tour packages.


The current TCS rate and the proposed TCS rate are tabulated below:


a) For the purpose of any education, if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, the present rate is 0.5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh. The proposed rate remains unchanged.


b) For the purpose of education, other than (i) or for the purpose of medical treatment, the present rate is 5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh. The proposed rate remains unchanged.


c) Overseas tour package – Existing Rate 5% without any threshold limit. – Proposed Rate 20% without any threshold limit.


d) Any other case - 5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh. Proposed rate 20% without any threshold limit.


It is to be noted that the present and proposed TCS rate are on the amount or the aggregate of the amounts being remitted by the buyer in a financial year. This amendment will come into effect from 1st July, 2023.


The increase in TCS on foreign remittances and sale of overseas tour packages will bring in additional revenue for the government and help in the progress of the country. However, this increase in TCS may affect the individuals who are planning to remit money abroad for education or medical treatment or planning to go on an overseas tour.


In conclusion, the Budget 2023 has proposed an increase in TCS for certain foreign remittances and sale of overseas tour packages, which will bring in additional revenue for the government. The individuals who are planning to remit money abroad or go on an overseas tour must be aware of the new TCS rate and plan their finances accordingly.



24 views0 comments

Recent Posts

See All

Comments


bottom of page