Section 206C(1G) of the Income Tax Act deals with the TCS on foreign remittances and the sale of overseas tour packages. This section was introduced with the aim of monitoring and collecting taxes from major financial transactions involving foreign exchange.
The provision of this section relates to:
The tax will be collected at the point of transaction by the authorized dealers or sellers of such packages.
The Finance Act 2023, made some considerable changes in this section by changing the rates at which tax needs to be collected. A summarised version of this section applicable for the F.Y. 2024-25 underlying the nature of remittances/payments abroad and the corresponding tax rates are as under:
|
Nature of Payment |
Rates at which tax needs to be collected |
|---|---|
|
LRS for education, financed by loan from financial institution |
Upto Rs. 7 lakhs- Nil |
|
LRS for medical treatment/ education (other than financed by loan) |
Upto Rs. 7 lakhs- Nil |
|
LRS for other purposes |
Upto Rs. 7 lakhs- Nil |
|
Purchase of Oversees tour programme package |
Upto Rs. 7 lakhs- 5% |
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