In Union Budget, 2020, it is proposed to widen the scope of TCS (Tax Collection at source). The Foreign Tour Operator will be liable to collect tax (TCS) from 01st April 2020.
1. Who Is Foreign Tour Operator and What Is Overseas Tour Package?
Foreign Tour Operator is a person who typically combines travel and tour components to create a package holiday. Overseas Tour Package is proposed to be defined to mean any tour package which offers visit to a country or countries or territory or territories outside India.
2. What Is Rate Of TCS?
TCS @5% or (@10% in case PAN/Aadhar Card is not available) u/s 206C (1G) has to be collected over and above the amount of tour package. TCS can be claimed by the buyer of the tour package while filing his/ her Income Tax Return.
3. When to Collect TCS by Tour Operator from Buyer?
- TCS to be collected only if foreign tour package is purchased from tour operator.
- No Threshold Limit to deduct TCS. Every foreign package will be liable for TCS including expenses regarding travelling, boarding etc.
- TCS is applicable to every type of foreign package i.e business tour, family tour etc.
4. What Care Should Be Taken by Person Going On Foreign Tour?
- Provide PAN Details to tour operator otherwise TCS will be deducted @10% instead of @5% and also YOU will not be able to claim the amount of TCS collected by tour operator.
- All the persons going on foreign tour and not filing income tax return will now have to file Income Tax Return, if they want to claim TCS.
As per new I T returns forms for F.Y.2019-20, taxpayer is required to provide passport number and amount spent on foreign travel if it is exceeding Rs, 2 Lakh in a year