Recently, the rates for tax collected at source or TCS were revised by the Ministry of Finance. Under the liberalised remittance scheme or the LRS, the government expanded the scope of TCS on payments. As per the revisions, the five per cent TCS would be increased to 20 per cent for remittance as well as for payments of tour packages. The implementation of these new TCS rates has been delayed. Here’s all you need to know about it.
Implementation Of New TCS Rates Postponed
Initially, these revisions were to be implemented from the 1st of July. However, on the 28th of June, it was announced that for foreign remittances under ₹7 lakh, TCS would not be incurred. This does not apply to international tour packages as they would continue to incur five per cent TCS instead of 20 per cent.
This is done to give card networks as well as banks to implement the necessary IT infrastructure required. The implementation of 20 per cent TCS on foreign remittance will now be implemented from the 1st of October.
In addition to this, the government has also decided to preclude international transactions made via credit cards from the purview of LRS. For foreign remittances made over ₹7 lakh, the TCS rates will differ depending on which category the remittance falls under.
Temporary Relief For The Travel Industry
These new revisions bring great relief, albeit temporary, to travel agents and tourism associations. The increased TCS would mean that travelling internationally would become more expensive. This would have negatively impacted the travel industry as a rise in price would mean a fall in the number of tourists.
For now, the old TCS rates will be applicable on tour packages as well as foreign remittances. According to an article recently published by the Economic Times, these rates will be continued till the 30th of September. This also means that come October, international travel may become more expensive.
Are you planning any international tours soon? Now is the time to book your packages! Let us know in the comments below!
Cover Image Credits: Canva Images