CA Umesh Sharma
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Arjun(Fictional Character): Krishna, How will Income Tax Department be a co-passenger when any taxpayer is going on Foreign Tour? Krishna(Fictional Character): Arjuna, in the Union Budget 2020 it is proposed to widen the provisions for levy of TCS (Tax Collected at Source). The foreign tour ope
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FAQ :
TCS (Tax Collected at Source) is a tax that foreign tour operators are liable to collect from travellers. It's levied at 5% (or 10% if PAN/Aadhaar is not provided) on the total cost of an overseas tour package, effective from April 1st, 2020.
An 'Overseas tour program package' includes any tour that involves visiting countries outside India and covers expenses like travel, hotel stays, boarding, lodging, or similar related costs.
No, there is no threshold limit for TCS collection on foreign tour packages. It applies to every foreign tour package, irrespective of the total amount involved, whether for business or personal travel.
Travellers should provide their PAN (Permanent Account Number) details to the tour operator. This ensures the TCS is collected at the correct rate (5%) and reflected in their 26AS statement, allowing them to claim it when filing their income tax return.
Tour operators must collect TCS at the earliest of when they receive the payment or debit the amount receivable. They must deposit the collected TCS by the 7th of the following month and file quarterly returns by the 15th of the month following the end of each quarter.
Travellers need to record all foreign tour expenses, including personal trips. If expenses exceed Rs. 2 lakhs, the passport number and amount spent must be reported in the income tax return. Those not filing returns may need to do so, as the department will compare declared income with foreign travel expenditure.
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