New Budget: The Interim Budget 2024 solidifies the incorporation of heightened Tax Collected at Source (TCS) rates on foreign remittances, aligning with the 2023 Budget’s proposal.
Finance Minister Nirmala Sitharaman had initially suggested an increase in the TCS rate on foreign remittances under the Liberalised Remittance Scheme (LRS) and bookings for foreign tour packages.
New Budget Updates
The adjustment, shifting the rate from 5% to 20% for foreign expenditures exceeding Rs 7 lakh annually per individual, awaits parliamentary approval for the corresponding amendment before implementation.
Presently, most foreign remittances and expenses via debit cards, forex cards, and other modes trigger a big tax amount, excluding credit card transactions.
This universal limit applies regardless of the chosen payment method. Sitharaman’s 2023 Budget announcement extended TCS to international expenditures using credit cards under LRS in May.
However, in June 2023, the government reversed this decision, exempting international credit card spends once again from TCS obligations.
The Interim Budget’s progression marks a pivotal step in formally incorporating the revised TCS rates on foreign remittances into the legal framework.
The impending parliamentary approval will determine the timeline for implementation, reinforcing the government’s commitment to regulating foreign expenditure and remittances in alignment with economic priorities.
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