Increase in TCS for traveling abroad

If you're planning to purchase an overseas tour package from a travel agent, there's a new development that you should be aware of. Starting from July 1, 2023, you will be required to pay a TCS (Tax Collected at Source) of 20 per cent on the total amount paid for the tour package. 

This new rule has been introduced by the Indian government as a part of its efforts to boost the tourism industry in the country. The TCS is a tax that is collected by the seller of goods or services from the buyer at the time of sale. In this case, the travel agent will collect the TCS from you and deposit it with the government.

The TCS will be applicable on all tour packages that are sold by registered travel agents and are priced at over INR 7 lakhs. The TCS will not be applicable on air tickets or hotel bookings that are made separately. If you purchase foreign currency from an authorized dealer for your foreign trip, even on an individual basis, you will be required to pay a TCS of 20 percent.

While the introduction of the TCS may increase the cost of purchasing an overseas tour package, it is important to remember that it is a tax that is being collected for the benefit of the tourism industry in the country. The revenue generated from the TCS will be used to develop and promote the tourism industry in India.

 

It is worth noting that the new tax on foreign tour packages will be applicable to both leisure and business travel. This means that businesses will also have to factor in the additional cost when sending employees abroad for work-related trips. Only this is not applicable for education and medical purposes. 

If you're planning to purchase an overseas tour package from a travel agent, it's important to keep this new rule in mind and factor in the additional cost when budgeting for your trip. It's also a good idea to consult with your travel agent and clarify any doubts or concerns that you may have about the TCS. Overall, this new development is a positive step towards boosting the tourism industry in India and promoting it as a top travel destination.

 

It's important to note that TCS is not a tax in itself, but rather an amount that is adjustable against a taxpayer's total income tax liability while filing their tax returns. This means that the person who paid the TCS can claim credit for the amount of TCS paid on any transaction, which can then be adjusted against their tax liability for the financial year.

Tips to save money

 

However, there are ways to book smartly and save money on your foreign tour packages.

To save money on foreign tour packages, travelers can consider booking early, being flexible with their travel dates, and looking for package deals that offer discounts on flights, accommodation, and activities.

 

Travelers also can book flights, accommodation, sightseeing packages separately, instead of buying one tour package. 

It is also important to read the fine print and understand what is included in the tour package to avoid any hidden fees or additional taxes.

 

However, it is important to be aware of the new tax and factor in the additional cost when planning your trip.

 

Finally, travelers should consider using a credit card that offers rewards or cash back on travel expenses. This can help offset the cost of the foreign tour package and provide additional savings.

 

By booking smartly and taking advantage of early bird discounts, package deals, and credit card rewards, travelers can save money on their foreign tour packages

 

 

Keep all relevant documents handy: To apply for TCS, you will need to provide certain documents such as your passport, flight tickets, and proof of payment for the tour package. Make sure to keep these documents safe and accessible.

 

Check the TCS rate: The TCS rate is currently set at 5% of the total cost of the tour package. Make sure to check the rate at the time of booking to ensure that you have enough funds to cover the additional cost.

 

Verify the TCS amount: Before making the payment for the tour package, verify the TCS amount with the travel agent or tour operator. This will ensure that you are aware of the additional cost and can plan your budget accordingly.

 

Make the payment: Once you have verified the TCS amount, make the payment for the tour package. The TCS amount will be collected at the time of payment and will be deducted from the total cost of the tour package.

 

Obtain the TCS certificate: After making the payment, make sure to obtain the TCS certificate from the travel agent or tour operator. This certificate will serve as proof that you have paid the TCS amount and can be used for filing your income tax return.

 

In conclusion, applying for TCS after a foreign tour is a straightforward process that requires you 
to keep relevant documents handy, check the TCS rate, verify the TCS amount, make the payment, and obtain the TCS certificate. By following these steps, you can ensure that you

 

What is TCS?

TCS stands for Tax Collected at Source. It is a tax that is collected by the seller of goods or services from the buyer at the time of sale.

 

 

The new TCS (Tax Collected at Source) rule for foreign travel in India requires that individuals purchasing foreign tour packages or making foreign remittances of INR 7 lakh or more in a financial year will be subject to a 5% TCS. The rule is aimed at preventing tax evasion and improving tax compliance. The TCS collected can be claimed as a tax credit when filing income tax returns.

 

If you're purchasing an overseas tour package from a registered travel agent and the package is priced at over INR 7 lakhs, you will have to pay the TCS.

 

The TCS is being introduced to boost the tourism industry in India. The revenue generated from the TCS will be used to develop and promote the tourism industry in the country.

 

The TCS on overseas tour packages comes into effect from July 1, 2023.

 

No, the TCS will not be applicable on air tickets or hotel bookings that are made separately from the tour package. It will only be applicable on the total amount paid for the tour package.