From July 1, 2023, 20 percent TCS will be applicable on foreign tour packages, due to which the expenditure on foreign travel will increase. There are 3 easy ways to avoid TCS applicable on foreign tour expenses, by adopting which you can save a significant portion of your hard earned money.
Be ready to spend more on your foreign tour from the month of July. Because, from July 1, 2023, 20 percent tax collected at source ( TCS ) will be applicable on foreign tour packages. At present, if you book a foreign tour package, you have to pay 5% TCS. From next month you will have to pay more cost while traveling.
20% TCS will be applicable from 1st July 2023
If you are planning to do international travel soon, then you must understand the new rule related to this TCS (20% tcs on overseas tour packages) and also know that you can charge your car Which option can be adopted to save the earning.
Use an International Debit or Credit Card Limit of Rs.7 Lakh
If you book your foreign tour through domestic travel agents or online portals, you will have to bear the brunt of TCS. But, if you take tour packages offered by international websites and pay through international debit and credit cards, there will be no TCS if the payment is within the limit of Rs 7 lakh. Because, the Finance Ministry said on 19 May 2023 that from 1 July 2023, no TCS will be levied on personal payments using international debit or credit cards up to Rs 7 lakh in a financial year.
Choose a different booking and payment method
Ankit Jain, partner, Ved Jain & Associates, says that TCS of 20 per cent is levied on foreign tour packages. Individuals can choose to book their flights, hotels and tourist places separately to form tour packages and avoid TCS. So if you buy your flight ticket directly from Air India or Vistara or Indigo, there will be no TCS. Similarly, if you book your hotel directly from the website of the concerned hotel and make the payment by debit or credit card, then you will not have to pay TCS. However, the limit for these payments is Rs 7 lakh.
Buy foreign exchange by June 30, 2023 to avoid higher TCS
Many people on international tours prefer to buy foreign exchange or use a forex card instead of using their debit or credit cards. You can buy foreign currency or forex card till 30 June 2023 to avoid paying more TCS.
Sudarshan Motwani, Founder and CEO of BookMyForex.com, said that the Reserve Bank of India (RBI) allows you to buy foreign currency or Foreign Currency Travel Card up to 60 days before the date of your travel. If you are planning to travel any time from now till the end of August, you can buy your Forex or Foreign Currency Travel Card before the end of June and save 20 per cent at TCS.
