From July 1, 2023, 20 percent TCS will be applicable on foreign tour packages, which will increase the cost of foreign travel. Here are 3 easy ways to avoid TCS on foreign travel expenses, by adopting which you can save a major chunk of your hard earned money.
Be prepared to spend more on your foreign trips from the month of July. Because, from July 1, 2023, 20 percent tax collected at source (TCS) will be applicable on foreign tour packages. At present, if you book a foreign tour package, you have to pay 5% TCS. From next month you will have to pay more during travel.
20% TCS will be applicable from 1st July 2023
If you are planning to travel internationally soon, you must understand this new TCS (20% TCS on foreign tour packages) rule and also know that you can charge your car, earn Which option can be adopted to save.
Rupee. Use International Debit or Credit card limit of 7 lakhs
If you book your tour abroad through domestic travel agents or online portals, you will have to bear the brunt of TCS. But, if you take tour packages offered by international websites and pay through international debit and credit cards, there will be no TCS if the payment is within the limit of Rs 7 lakh. Because, the Finance Ministry had said on 19 May 2023 that from 1 July 2023, no TCS would be levied on individual payments made using international debit or credit cards up to Rs 7 lakh in a financial year.
Choose a different booking and payment method
Ankit Jain, partner, Ved Jain & Associates, says that 20 per cent TCS is levied on foreign tour packages. Individuals can choose to book their flights, hotels and sightseeing separately to create tour packages and avoid TCS. So if you buy your flight ticket directly from Air India or Vistara or Indigo, there will be no TCS. Similarly, if you book your hotel directly from the website of the concerned hotel and make the payment by debit or credit card, then you will not have to pay TCS. However, the limit for these payments is Rs 7 lakh.
Buy forex till 30th June 2023 to avoid higher TCS
On international trips many people prefer to buy foreign currency or use a forex card instead of using their debit or credit cards. You can buy foreign currency or forex card till June 30, 2023 to avoid paying more TCS.
Sudarshan Motwani, Founder and CEO of BookMyForex.com, said that the Reserve Bank of India (RBI) allows you to buy foreign currency or the Foreign Exchange Travel Card up to 60 days before the date of your travel. If you are planning to travel any time from now till the end of August, you can buy your forex or forex travel card before the end of June and save 20 per cent at TCS.
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