TCS on remittance out of India and on overseas tour programme package [ Section 206C(1G) ] - Income Tax - Ready Reckoner - Income Tax

TCS on remittance out of India and on overseas tour programme package [ Section 206C(1G) ] Person Responsible for collecting TCS : Every person, (a) being an authorised dealer, who receives an amount, for remittance out of India [Omitted by FA, 2023, w.e.f., 01-07-2023 ] from a buyer, being a person remitting such amount out of India [Omitted by FA, 2023, w.e.f., 01-07-2023 ] under the Liberalised Remittance Scheme of the Reserve Bank of India; (b) being a seller of an overseas tour programme package, who receives any amount from a buyer, being the person who purchases such package, Time for collecting TCS At the time of debiting the amount payable by the buyer or at the time of receipt of such amount from the said buyer, by any mode, whichever is earlier, Rate of TCS :- Read with Circular 10/2023 dated 30.06.2023 Nature of payment Earlier rate before Finance Act, 2023 (w.e.f. From 1st October 2020 to 30th September 2023) Rate from 1st October, 2023 to 31st March 2025 New rate w.e.f. 1st April, 2025 (1) (2) (3) (4) (i) LRS for education, financed by loan from financial institution as define under section 80E(3)(b), for the purpose of pursuing any education. [ Third Proviso ] Nil upto Rs 7 lakh 0.5% above Rs 7 lakh Nil upto Rs 7 lakh 0.5% above Rs 7 lakh Nil (ii) LRS for Medical treatment/ education other than financed by loan mention above (i) [ Second Proviso ] Nil upto Rs 7 lakh 5% above Rs 7 lakh Nil upto Rs 7 lakh 5% above Rs 7 lakh Nil upto Rs 10 lakh 5% above Rs 10 lakh (iii) LRS for other purposes [ Second Proviso ] Nil upto Rs 7 lakh 5% above Rs 7 lakh Nil upto Rs 7 lakh 20% above Rs 7 lakh Nil upto Rs 10 lakh 20% above Rs 10 lakh (iv) Purchase of Overseas tour program package [ Fourth Proviso ] 5% (without threshold) 5% till Rs 7 lakh, 20% thereafter 5% till Rs 10 lakh, 20% thereafter Non-applicability of the provision of Section 206C(1H) (a) From 01.10.2020 to 30.07.2023 - The authorised dealer shall not collect the sum, if the amount or aggregate of the amounts being remitted by a buyer is less than Rs. 7,00,000 in a financial year and is for a purpose other than purchase of overseas tour programme package. [ First Proviso of Section 206C(1G) ] (b) From 01.07.2023 to 31.03.2025 The authorised dealer shall not collect the sum, if the amount or aggregate of the amounts being remitted by a buyer is less than Rs. 7,00,000 in a financial year and is for a purpose other than purchase of overseas tour programme package and is for the purposes of education or medical treatment [Amended by FA, 2023, w.e.f., 01-07-2023 ] [ First Proviso of Section 206C(1G) ] The authorised dealer shall not collect the sum, if the amount or aggregate of the amounts being remitted by a buyer is less than Rs. 7,00,000 in a financial year. and is for the purposes of education or medical treatment [ Omitted by Finance Act, 2024 w.e.f. 01.07.2023 ] [ First Proviso of Section 206C(1G) ] (c) From 01.04.2025 - The authorised dealer shall not collect the sum , if the amount or aggregate of the amounts being remitted by a buyer is less than Rs. 10,00,000 in a financial year. [ Amended vide Finance Act, 2025 ] [ First Proviso of Section 206C(1G) ] (d) The authorised dealer shall not collect the sum on an amount in respect of which the sum has been collected by the seller. (e) The provisions of this sub-section shall not apply , if the buyer is, (i) liable to deduct tax at source under any other provision of this Act and has deducted such amount; (ii) the Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority as defined in the Explanation of section 10(20) or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein. Meaning of specified term (i) authorised dealer means a person authorised by the Reserve Bank of India under section 10(1) of the Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign security; (ii) overseas tour program package means any tour package which offers visit to a country or countries or territory or territories outside India and includes expenses for travel or hotel stay or boarding or lodging or any other expenditure of similar nature or in relation thereto. Important note Circular to remove difficulty in implementation of changes relating to Tax Collection at Source (TCS) on Liberalised Remittance Scheme (LRS) and on purchase of overseas tour program package. [ Circular No. 10/2023 dated 30.06.2023 ] The Central Government hereby notifies that the provisions of section 206C(1G) of the Act shall not apply to a person (being a buyer) who is a non-resident in terms of section 6 of the Act and who does not have a permanent establishment in India. [ Circular no. 99/2022 dated 17.08.2022 ] The Central Government hereby notifies that the provisions of section 206C(1G) shall not apply to an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6 of the Act, and who is visiting India. [ Circular no. 20/2022 dated 30.03.2022 ]