Home National Mumbai: Big Blow to those travelling abroad at others expenses – I.T Amendment effective 1st April 2020 goes unnoticed

Mumbai: Big Blow to those travelling abroad at others expenses – I.T Amendment effective 1st April 2020 goes unnoticed

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Mumbai: Big Blow to those travelling abroad at others expenses – I.T Amendment effective 1st April 2020 goes unnoticed

Mumbai: It comes as s big blow to those undertaking foreign tours at others expenses. Union Finance Minister Nirmala Sitharaman raises alarm bells to those travelling abroad on tour package booked by others. This is a common trend to oblige senior officials in government and private sector in the country.

In accordance to Income Tax Amendment effective April 1, 2020, those embarking on overseas tour is liable to pay 5% (PAN holder) and 10% (non-PAN holder) TCS (Tax Collection at Source) on total amount of the Tour Package. By paying TCS, each person will come on the radar of the Income Tax Department, which will be able to ensure  his or her income through their income tax returns (ITR).

Presently, there is a provision in ITR to mention the passport number in prescribed column. But not many taxpayers take it seriously. Even the tax consultants also don’t press their clients to fill the passport number on their proposed visit abroad in the financial year. A large number of people travel  abroad on leisure trip many times in a year.

Obviously, they use black money while paying tour package bill. In other cases, high ranking government and private sector officials make foreign tours with family for which other person or people make payment. This is because the latter seek undue favours from officials. And to oblige them, they finance overseas trips of officials, which tantamounts to bribe. It will be for the very first time that  such people will come under scrutiny.

Notably, in the 2020-2021 Union Budget, Sitharaman made provision to impose TCS on every foreign tour package bill amount. It means every foreign visitor irrespective of whether he or she is an income tax payer or not, has to pay tax.

But, there is a provision for a  person whose annual income is under threshold limit (under Rs 5 lakh) visits a foreign country. He/She will be eligible for TCS refund.

Analysing the provision, according to tax consultants, income tax department will be able to cross check the standard of living of an Indian who travels abroad through his ITR, which will reveal the actual income and his extravagance. It will stop black money in overseas travel.

Now, foreign travellers will have to pay 5% TCS on total travel package bill. This measure will bring those people on income tax department radar who frequently travel abroad and hide it in their ITR. Through data analytics, department will be able to assess actual income of foreign traveller.
This is a challenging provision for government employees and their family members, doctors etc who go abroad on sponsorship.       

Every foreign traveller is liable to pay 5% and 10% tax collection at sources (TCS) on total amount of tour package

The practice of booking tour package by person who wishes to oblige influential people will stop.
Forward as received.

News Edit by K.V Raman

File Pictures Of Tevel Event OTM held in Mumbai
File Pictures Of Tevel Event OTM held in Mumbai

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