If you’re planning a world journey in October, then be able to loosen your purse strings extra. This is as a result of the brand new rule levying 20% tax collected at supply (TCS) will kick in from 1 October 2023. This applies not solely to overseas journeys however to each transaction you make overseas by way of no matter technique.
What is tax collected at supply (TCS)?
The tax collected on the supply is applied by the federal government to gather taxes immediately from the vendor on the supply of sure transactions.
How will 20% TCS from subsequent month impression your journey
Commencing from October 1, 2023, there shall be a major alteration in TCS rules, witnessing a steep rise from the present 5% to an elevated 20%. This leads to a 15% escalation in bills for people looking for worldwide journey packages
Rikant Pittie, Co-founder, EaseMyTrip stated that in mild of those adjustments, vacationers are suggested to:
1) Ensure that the price of their journey package deal doesn’t exceed the 7 Lakh threshold per particular person.
2) We extremely suggest meticulous and strategic journey planning to maximise finances effectivity.
“For packages valued at or below 7 lakh per monetary yr per particular person, the 5% TCS price will stay relevant. This usually encompasses the prices related to an annual abroad leisure tour,” he added.
What does 20% TCS rule mean?
Any payments done in the foreign land exceeding ₹7 lakh a year through international credit and debit cards will be subject to TCS levy at the rate of 20 per cent effective 1 October 2023.
Can taxpayers claim ‘20% TCS’ back?
Yes, taxpayers can claim a TCS refund in your Income Tax Return. “Individuals will see a higher bill on their cards, potentially blocking money for several months until a return is filed/refund is claimed and tax already collected is adjusted. Taxpayers may now have to keep track of these TCS entries in their Form 26AS,” stated Archit Gupta, Founder, and CEO, Clear.
The Union Budget 2023-24 had hiked TCS charges to twenty%, from 5% at present, on abroad tour packages and funds remitted below LRS (apart from for schooling and medical functions).
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Updated: 13 Sep 2023, 11:23 AM IST
