In a positive development for individuals planning to travel abroad, the government has announced an extension of the deadline for the implementation of Tax Collection at Source (TCS) by three months.
The new TCS rule, originally scheduled to come into effect on July 1, 2023, will now be enforced starting from October 1, 2023.
Consequently, the existing TCS regulations will remain in force until September 30, 2023.
Under the current TCS rate of 5%, travelers purchasing foreign travel packages from Indian operators are required to pay an additional tax of 5% on the package cost.
However, starting October 1, this rate will increase to 20%.
Consequently, travelers will be subject to an additional 20% tax on the total cost of their foreign travel package when booking through an Indian operator.
Abhishek Aneja, an expert in income tax and personal finance matters, explains the TCS rule in detail.
For instance, if you decide to purchase a travel package worth Rs 20 lakh to visit Dubai, you will be required to pay an additional Rs 40,000 due to the 20% TCS levy imposed on tour packages.
Presently, the TCS for this foreign tour package would amount to Rs 10,000.
Furthermore, if you engage in foreign currency exchange through a forex dealer under the Liberalized Remittance Scheme (LRS), you will also be subject to a 20% TCS.
