TCS-Overseas Remittances & Tour Packages [Section 206C(1G)]

Описание: Overseas Remittances & Tour Packages [Section 206C(1G)]

Who is required to collect TCS?
• Authorized Dealer under LRS
• Seller of overseas tour program
Timing: TCS at earlier of:
• Amount debited, or
• Receipt of amount
TCS Rates:
Case TCS Rate
Education (self-funded) / Medical= Nil upto ₹7 lakh; 5% on excess
Education (via loan u/s 80E)= Nil upto ₹7 lakh; 0.5% on excess
Overseas tour package= 5% upto ₹7 lakh; 20% on excess
Other remittances= Nil upto ₹7 lakh; 20% on excess
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CBDT Circular 10/2023 (Clarifications)

1. International Credit Card use overseas:
o Not covered under LRS yet → No TCS
2. ₹7 lakh Threshold:
o Is combined for LRS (education, medical, others)
o Applies per remitter, not per AD
o Dealers may rely on self-declaration
o False info → action against remitter
3. Thresholds for LRS vs Tour Package:
o ₹7 lakh for LRS (for applicability)
o ₹7 lakh for tour package (to decide 5% or 20%)
→ These operate independently
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Question : Applicability of TCS on Purchase of Overseas Tour Program Package
Facts:
• Resident individual spends ₹3 lakh on an overseas tour program package via a foreign
TCS Applicability:
• TCS is applicable even though the amount is less than ₹7 lakh, because:
o Threshold of ₹7 lakh is not applicable to TCS on overseas tour program package.
o This is as per Section 206C(1G)(b).
• Applicable TCS rate: 5%.
• Tax to be collected by the seller (foreign tour operator or travel agent acting on their behalf).
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Question : Scope of Remittance under LRS for Medical Treatment and Education
Medical Treatment :
Includes:
1. Purchase of travel tickets for the patient and attendant.
2. Medical expenses overseas.
3. Day-to-day expenses (boarding, local travel, etc.).
TCS Applicability:
• Applicable when remittance is under:
o For travel abroad for medical reasons.
o For remote/on-site medical services (no travel).
Education :
Includes:
1. Purchase of tickets for student travel.
2. Tuition and fees to educational institutions.
3. Day-to-day expenses (accommodation, food, local transport, etc.).
TCS Applicability:
• Applicable when remittance is under:
o Travel + education services.
o Remote education services (e.g., correspondence).
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Question : Whether Standalone Purchase of International Ticket or Hotel is an "Overseas Tour Program Package"
Definition (as per Sec 206C(1G)):
"Overseas tour program package" includes a visit to countries outside India and covers:
• Travel,
• Hotel stay/boarding/lodging,
• Any related expenditure.
Clarification:
• Standalone purchase of:
o Only international air ticket or
o Only hotel stay
⇒ Does not qualify as an overseas tour program package.
Minimum requirement:
To qualify as a "package," it must include at least two of the following:
1. International travel ticket
2. Hotel/boarding/lodging
3. Other expenditure of similar nature
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Exemptions from TCS Provisions under Section 206C(1G):
1. No TCS if:
o TCS already collected by seller.
o Buyer is liable to deduct TDS and has done so.
o Buyer is Government body, embassy, consulate, notified persons.
o Buyer is a non-resident under Section 6 without a PE in India.
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