New TCS Rule: The government has extended the date of implementation of revised TCS rates by 3 months. Now the new rule of TCS will be applicable from October 1.
New Delhi. If you are going for a foreign holiday then there is relief news for you. The government has decided to extend the deadline for implementing Tax Collection at Source (TCS) by 3 months. The new rule of TCS will be implemented from October 1, 2023 instead of July 1. Due to extension of the deadline, the old rules regarding TCS will remain applicable till 30 September 2023.
Currently the TCS rate is 5 percent. From October 1, it will increase to 20 percent. This means that if you buy a foreign travel package from an Indian operator, the operator will collect an additional 20 percent tax on the cost of the package from you.
👉 Important changes w.r.t. Liberalised Remittance Scheme #LRS and Tax Collected at Source #TCS
👉 No change in rate of #TCS for all purposes under #LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to ₹7 lakh per individual per annum
— Ministry of Finance (@FinMinIndia) June 28, 2023
Explaining the TCS rule, Abhishek Aneja, an expert in matters related to income tax and personal finance, says, “Suppose you buy a package worth Rs 20 lakh to go to Dubai. To book this package you will have to pay an additional Rs 40 thousand. The reason for this is the 20 percent TCS charged on tour packages. At the current rate, TCS of only Rs 10,000 will be charged on this foreign tour package. Apart from foreign tour packages, if you buy foreign currency from a forex dealer under the Liberalized Remittance Scheme (LRS), then you will have to pay 20 percent TCS on that also.”
