Monica Malik Instagram – Three ways to avoid 20% TCS during your next international trip
1) Use the Rs 7 lakh limit of international debit or credit card
As you can observe, a substantial TCS amount must be borne if you book your foreign trip through domestic travel agents or online platforms within India. However, choose to book a tour package offered by international websites and make payments through an international debit or credit card.
You will be exempt from TCS as long as the payments remain below the threshold of Rs 7 lakh. On May 19, 2023, the finance ministry announced that starting from July 1, 2023, no TCS will be imposed on individual payments made using international debit or credit cards up to Rs 7 lakh in a financial year. It is essential to remember that the threshold for exemption is set at Rs 7 lakh.
2) Separate booking and payments can help you save TCS
Another critical point is that a 20% TCS is levied on overseas tour packages. However, the definition of a “tour package” under the law is unclear. In light of the proposed increase in TCS, individuals may choose to book their flights, hotels, and sightseeing components separately to avoid forming a package and attracting the TCS levy.
3) Buying foreign exchange by June 30, 2023, to avoid high TCS
Many individuals purchase foreign currency or utilise a forex card rather than relying solely on their debit or credit cards when travelling internationally.
Purchasing foreign currency or a Forex card by June 30, 2023, is advisable to avoid paying higher TCS. Reserve Bank of India (RBI) permits the purchase of foreign currencies or forex travel cards up to 60 days before the travel date.
If you have plans to travel anytime from now until the end of August, you can take advantage of this opportunity and buy your foreign currencies or Forex travel cards before the end of June. This way, you can save 20% on TCS.
Source- Cleartax
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