Tax Collected at Source (TCS) is an additional amount collected as tax by a seller of specified goods and services from the buyer at the time of sale over and above the sale amount and is remitted to the government account under the buyer’s Permanent Account Number (PAN).
WHY THE SUDDEN INCREASE IN TCS RATES?
To bring uniform taxation on the purchase of foreign tours by travel agents. And mainly, casting a wider tax net by ensuring that overseas remittances are tracked and reported.
IS THIS ONLY FOR TRAVEL PACKAGES?
No, this is applicable on any international transaction under the Liberalised Remittance Scheme (LRS), which includes bank remittance, debit card, forex card, travel card and credit card.
IS IT POSSIBLE TO CLAIM THE RETURN OF THE TAX COLLECTED AT SOURCE THAT HAS BEEN PAID?
Yes, the amount paid as TCS can be claimed as advance tax while filing your income tax return or ITR.
HOW TCS CREDIT CAN BE AVAILED BY THE TRAVELLER?
Amount of TCS collected will get reflected in the FORM 26AS of the traveller on successful Filing of TCS Return by the seller. Such amount of TCS will be available as set off against the Net Income Tax payable by the traveller for the respective Financial Year. If, there is No Tax Payable during the year or amount of TCS made is higher than Total Income Tax Payable, then the traveller can claim refund of such Tax Collected at Source on filing of his Income Tax Return.