Government says no TCS increase on tour packages until this date, continue reading
In the Budget this year, certain changes were announced to the system of Tax Collection at Source (TCS) on payments under the Liberalised Remittance Scheme (LRS) and on overseas tour program packages. These were to take effect from 1st July 2023. The government in its earlier notification said that the TCS on tour packages will be increased from 5% to 20%, among other changes. The government had received numerous comments and suggestions were received which have been carefully considered.
After considering the comments and suggestions, the government decided to make suitable changes. A press release was done by the Ministry of Finance on 28th June in regard to this. Firstly, it has been decided that there will be no change in the rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of the mode of payment, for amounts up to Rs. 7 lahks per individual per annum. It has also been decided to give more time for the implementation of the revised TCS rates and for the inclusion of credit card payments in LRS.
Increased TCS on Tour Package to apply from 1st October 2023
Increased TCS rates to apply from 1st October 2023: The increase in TCS rates; which were to come into effect from 1st July 2023 shall now come into effect from 1st October 2023. Till 30th September 2023, earlier rates (prior to amendment by the Finance Act 2023) shall continue to apply.
Earlier and new TCS rates are summarised as under:
| Nature of payment (1) | Earlier rate before Finance Act, 2023 (2) | New rate wef 1st October 2023 (3) |
| LRS for education financed by loan | Nil upto Rs 7 lakh 0.5% above Rs 7 Lakh | Nil upto Rs 7 lakh 0.5% above Rs 7 Lakh |
| LRS for Medical treatment/ education (other than financed by loan) | Nil upto Rs 7 lakh 5% above Rs 7 Lakh | Nil upto Rs 7 lakh 5% above Rs 7 Lakh |
| LRS for other purposes | Nil upto Rs 7 lakh 5% above Rs 7 Lakh | Nil upto Rs 7 lakh 20% above Rs 7 Lakh |
| Purchase of Overseas tour program package | 5% (without threshold) | 5% till Rs 7 Lakh, 20% thereafter |
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