Understanding 20% TCS on overseas spends

[CC_Fire]

Anyone figured out what happens to overseas FX spends made using credit cards from July 1? For ex: if you are buying something from Amazon USA in USD, will that attract a 20% TCS ?

Would be great to get a view on this from a CA or someone familiar with what are the exact changes?

 

[caabhi]

Anyone figured out what happens to overseas FX spends made using credit cards from July 1? For ex: if you are buying something from Amazon USA in USD, will that attract a 20% TCS ?

Would be great to get a view on this from a CA or someone familiar with what are the exact changes?

Answer is no in my opinion.

Useful article for your reference

From studying abroad to holidaying overseas: How foreign remittance will be taxed from July 1 - Times of India

Budget News: This increase in TCS will include payments towards tours, for buying currency for travel, making any gifts or loans to relatives abroad, purchasing an

timesofindia.indiatimes.com

 

[CC_Fire]

yes, most articles i have read covers travel "packages" but what is not clear is if i say book a hotel in the US through their website using my Indian credit card or I use my credit abroad while travelling, will TCS be applicable there too?

 

[thanix]

As usual the wordings are vague. We have to wait what guidelines IT department is going to issue in June for Banks, card issuer and financial institutions.

But this 20% is draconian and this government will face the wrath of upper middle class Indians.

 

[caabhi]

yes, most articles i have read covers travel "packages" but what is not clear is if i say book a hotel in the US through their website using my Indian credit card or I use my credit abroad while travelling, will TCS be applicable there too?

This is covers the packages provided by tour operators and they would do TCS. Similar to the TCS on high value cars.
I don't think it covers direct hotel bookings done by using Credit card or usage outside country.

 

[CC_Fire]

As usual the wordings are vague. We have to wait what guidelines IT department is going to issue in June for Banks, card issuer and financial institutions.

But this 20% is draconian and this government will face the wrath of upper middle class Indians.

It is so ridiculous that its beyond any comprehension!. I understand some 1% TCS to track transactions if they really want to. But 20% is just silly

 

[CC_Fire]

This is covers the packages provided by tour operators and they would do TCS. Similar to the TCS on high value cars.
I don't think it covers direct hotel bookings done by using Credit card or usage outside country.

i hope atleast that happens, basically tour operators and OTAs will be out of business as no one will book through them and book flights and hotels directly.

 

[Dragon_slayer]

It is so ridiculous that its beyond any comprehension!. I understand some 1% TCS to track transactions if they really want to. But 20% is just silly

They want to keep people's money interest free + track them.

 

[CARDBITRAGE]

It is going waaaaaaaay too complicated to track credit card forex transactions. It wouldn't have been a problem if there was a uniform rate of taxation. The problem is going to be differentiating education/medical related expenses from travel related expenses. I don't know how they are going to pull this off. Banks will be scrambling to build a reliable system to accurately capture and categorise transactions.

 

[thanix]

I am all for TCS but put it if there is no PAN or ITR filing and ppl go for foreign tour. Previous system of 7L established a good threshold. I am okay for reduced threshold of 5L but Don't freeload on the salaried folks money.

At least business folks will adjust this TCS in the quarterly advance tax. Good luck for salaried in convincing the faceless office payroll team to process the TCS certificate and adjust against TDS.