- July 1, 2023
Income Tax Return: Rs 7 lakh combined threshold for calculating TCS: Finance ministry – Times of India
NEW DELHI: The finance ministry Friday clarified the threshold of Rs 7 lakh for the liberalised remittance scheme is the combined level for calculating tax collected at source (TCS), irrespective of the purpose of remittance such as medical treatment and education. It said overseas medical expenses will include spending on ticket, medical costs and day-to-day expenses. Remittance for education will include the travel cost, tuition fee & other day-to-day expenses for studies.
The FAQs clarified ‘overseas tour package’ will cover travel expenses, hotels, boarding and lodging and ‘expenditure of similar nature’. Purchase of only international tickets or just hotel stay is not covered.
FAQs silent on various issues raised by banks
The FAQs come two days after the finance ministry deferred the implementation of higher TCS and made some crucial tweaks in the face of criticism from several quarters.
The government also said while it readies a system for real-time update of remittance under LRS the details of earlier remittances during the financial can be taken by the authorised dealer at the time when the transaction is being done.
“If the authorised dealer correctly collects TCS on information given under this undertaking, he will not be treated as assessee in default,” the government said.
Clarifying on the different TCS during the first and the second half of the current financial year, the ministry said that the Rs 7 lakh threshold applies for entire 2023-24. So, if the threshold is exhausted before October 1, all subsequent remittances would attract TCS.
The government has also said purchase of overseas tour programmes which are classified under LRS will face TCS under this head and not attract provisions for remittance.
The FAQs are silent on various issues raised by banks as their systems are not geared to deal with the proposed tax changes. In the last Budget, FM Nirmala Sitharaman had announced an increase in TCS for several overseas spends.
The FAQs clarified ‘overseas tour package’ will cover travel expenses, hotels, boarding and lodging and ‘expenditure of similar nature’. Purchase of only international tickets or just hotel stay is not covered.
FAQs silent on various issues raised by banks
The FAQs come two days after the finance ministry deferred the implementation of higher TCS and made some crucial tweaks in the face of criticism from several quarters.
The government also said while it readies a system for real-time update of remittance under LRS the details of earlier remittances during the financial can be taken by the authorised dealer at the time when the transaction is being done.
“If the authorised dealer correctly collects TCS on information given under this undertaking, he will not be treated as assessee in default,” the government said.
Clarifying on the different TCS during the first and the second half of the current financial year, the ministry said that the Rs 7 lakh threshold applies for entire 2023-24. So, if the threshold is exhausted before October 1, all subsequent remittances would attract TCS.
The government has also said purchase of overseas tour programmes which are classified under LRS will face TCS under this head and not attract provisions for remittance.
The FAQs are silent on various issues raised by banks as their systems are not geared to deal with the proposed tax changes. In the last Budget, FM Nirmala Sitharaman had announced an increase in TCS for several overseas spends.
