Finance Minister Nirmala Sitharaman has proposed to increase the threshold for collecting TCS on Liberalised Remittance Scheme transactions from Rs 7 lakh to Rs 10 lakh. This move is expected to benefit the travel and foreign exchange sectors, providing a boost to outbound tourism, education, and the airline industry. Experts say this hike in TCS threshold will also ease the burden on students and individuals seeking medical treatment abroad. Additionally, the Finance Minister's second Budget for the BJP government focuses on various sectors to revive the struggling Indian economy.
TCS Threshold Hike: Boosting Travel, Education, and Healthcare Abroad
Background:
Tax Collected at Source (TCS) is a mechanism where a percentage of tax is collected at the time of remittance to certain countries through authorized dealers. The threshold limit, which was initially set at Rs 50,000, was raised to Rs 7 lakh in the previous Union Budget.
Finance Minister's Proposal:
In the 2023-2024 Union Budget, Finance Minister Nirmala Sitharaman proposed a further increase in the TCS threshold from Rs 7 lakh to Rs 10 lakh on Liberalised Remittance Scheme (LRS) transactions. This move aims to provide relief to individuals and businesses engaged in outbound activities, such as travel, education, and healthcare.
Benefits of the Threshold Hike:
FAQs:
What is Liberalised Remittance Scheme (LRS)? A: LRS allows Indian residents to remit up to $250,000 per financial year for various purposes, such as education, travel, and investments.
What is TCS on LRS transactions? A: TCS is a tax collected at the source on remittances made under LRS. The current rate is 5%.
What are the benefits of the TCS threshold hike? A: The threshold hike reduces the financial burden on individuals and businesses engaged in outbound activities.
How will the TCS threshold hike impact outbound tourism? A: The reduced TCS will make it more affordable for individuals to travel abroad, potentially boosting outbound tourism.
What are the other highlights of the Finance Minister's Budget for the travel sector? A: The Budget also announced a visa-on-arrival facility for tourists from 16 countries, a revival package for the cruise industry, and a focus on promoting domestic tourism.
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