How to plan for Foreign Travel and its TCS under Income Tax w.e.f. 1.4.2020!!!” CA Umesh Sharma.

Karneeti Part 327
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 operator will be liable to collect tax (TCS) u/s 206C (1G) from the passenger of such tour package @5% (@10% if PAN/Aadhar of passenger is not available) over and above the cost of his tour package.“Overseas tour program package” is proposed to be defined to mean any tour package which offers visit to acountry or countries or territory or territories outside India and includes expenses for travel or hotel stay or boardingor lodging or any other expense of similar nature or in relation thereto. This section will be applicable from 1st April 2020.


Arjun: Krishna, When will the foreign tour operatorbe liable to collect TCS on foreign tour package from the buyer?
Krishna: Arjuna, TCS is liable to be collected if foreign tour package is purchased from a tour operator. There is no threshold limit for foreign tour operator to collect TCS and therefore every foreign tour package will be liable for TCS irrespective of the amount involved. It is applicable to every foreign tour package i.e. business tour, family tour, etc. Also it covers all expenses regarding travel, lodging, boarding, etc. However the above provision will not be applicable if the buyer has deducted TDS on the same transaction. It will also not apply if the buyer is Central or State government, an embassy, high commission, etc subject to conditions.

Sharma.