Union Budget 2023-24 + FINANCE Bill, 2023

Increasing rate of TCS of certain remittances

Section 206C of the Act provides for TCS on business of trading in alcohol, liquor, forest produce, scrap etc. Sub-section (1G) of the aforesaid section provides for TCS on foreign remittance through the Liberalised Remittance Scheme and on sale of overseas tour package.

2. In order to increase TCS on certain foreign remittances and on sale of overseas tour packages, amendment is proposed in sub-section (1G) of section 206C of the Act.

3. The current and proposed TCS rates are tabulated as under:

S. No	Type of remittance	Present rate*	Proposed rate*
(i)	For the purpose of any education, if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E.	0.5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh.	No change.
(ii)	For the purpose of education, other than (i) or for the purpose of medical treatment.	5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh.	No change.
(iii)	Overseas tour package	5% without any threshold limit.	20% without any threshold limit.
(iv)	Any other case	5% of the amount or the aggregate of the amounts in excess of Rs. 7 lakh.	20% without any threshold limit.

* In the table above, the present rate and the proposed rate of TCS are on the amount or the aggregate of the amounts being remitted by the buyer in a financial year.

4. This amendment will take effect from 1st July, 2023.

[clause 90]

 

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Full Text:

Union Budget 2023-24 + FINANCE Bill, 2023

TCS increase on foreign remittances: higher withholding expands coverage and raises compliance burden for remitters. Increase in the rate of TCS is proposed by amending sub section (1G) of section 206C to raise withholding on certain foreign remittances and sales of overseas tour packages; education and medical remittances retain prior treatment under specified conditions, while tour packages and other remittances become subject to higher rate without threshold, effective from the stated date in the Finance Bill.