TCS on foreign remittances
Section 206C(1G) of the Income-tax Act, 1961 (‘IT Act’) introduced by the Finance Act, 2020, provides for Tax Collection at Source (‘TCS’) on (i) foreign remittance under the Liberalised Remittance Scheme (LRS) in excess of INR 7 lakh per year, and on (ii) sale of overseas tour program package. The Finance Act, 2023, (i) increased the rate of TCS from 5% to 20%, and (ii) removed the threshold of INR 7 lakh for triggering TCS on LRS. These amendments were to take effect from 1 July 2023.
Date & Time
05
Jul 2023 | 3:00 PM - 4:00 PM
Separately, Rule 7 of the FEMA (Current Account Transaction) Rules, 2000 which kept international credit card outside the purview of LRS was omitted by the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023, with effect from 16 May 2023. These amendments resulted in any spending on international credit cards to be subject to TCS @ 20%.
The changes in IT Act and FEMA created numerous practical difficulties and interpretational challenges. Considering the difficulties in implementation, the Government vide a Press Release dated 28 June 2023 has expressed its intention to extend the effect of these amendments to 1 October 2023. The CBDT has, vide Circular 10 of 2023 dated 30 June 2023 issued certain guidelines on applicability of TCS on LRS.
Lakshmikumaran & Sridharan Attorneys is organizing a webinar on 5 July 2023 (Wednesday) between 3:00 PM to 4:00 PM, for an in-depth understanding of changes made in the IT Act and the Foreign Exchange Regulations. The webinar would cover:
- The scheme of TCS on LRS, as introduced and as amended.
- The scheme of TCS on sale of overseas tour programme package
- Law relating to LRS and drawing of foreign exchange through credit card
- Effect of recent amendments to IT Act and Exchange Control Regulations
- Ambit of clarification issued by CBDT in Circular 10 of 2023 dated 30 June 2023
- Certain practical examples
Speakers:
- S Vasudevan – Executive Partner, LKS
- S. Sriram – Partner, LKS
- Dinesh Kukreja – Principal Associate, LKS
