CBDT exempts foreign legal entities from TCS for remittances and travel packages

Disclaimer:This article was automatically downloaded from the agency feed. It has not been edited by the NavbharatTimes.com team.

Language , Updated: August 18, 2022, 8:57 PM

New Delhi, Aug 18 (PTI) The Income Tax Department has exempted legal entities and foreign companies from 5% TCS (Collection of Tax at Source) on remittances and packages of trip abroad. This exemption has been granted to those who do not have a permanent establishment or permanent place of work in the country. The Central Commission for Direct Taxation (CBDT) has notified changes to the income tax rules and widened the scope of exemption. Previously, this exemption under Section 206(1G) of the Income Tax Act was only available to non-residents. Article 206 (1G) was introduced in the 2022 finance law.

New Delhi, Aug 18 (PTI) The Income Tax Department has exempted legal entities and foreign companies from 5% TCS (Collection of Tax at Source) on remittances and packages of trip abroad. This exemption has been granted to those who do not have a permanent establishment or permanent place of work in the country.

The Central Commission for Direct Taxation (CBDT) has notified changes to the income tax rules and widened the scope of exemption. Previously, this exemption under Section 206(1G) of the Income Tax Act was only available to non-residents.

Section 206 (1G) was introduced in the Finance Act 2022. It came into force in October 2020. Its purpose was to monitor the foreign exchange expenditure of the person residing in India. Under this provision, under the liberalized remittance scheme of the Reserve Bank of India (RBI), it has been proposed to levy TCS at the rate of 5% on transfers of Rs 7 lakh or more.

Domestic tour operators had to deduct TCS on money received from overseas Indians visiting India and booking their overseas travel packages from the country.

Om Rajpurohit, Director (Corporate and International Taxation), AMRG & Associates, said the scope of the exemption under Section 206(1G) has been expanded. Previously, it was only available to expats. Now, CBDT has also exempted legal persons, companies, limited liability partnerships (LLPs), etc., from the obligation of the TCS, which are not residents and do not have a permanent establishment or of permanent establishment in the country.

“This will reduce the compliance burden for migrants and increase their confidence in Indian tax laws…” he said.

Source: navbharattimes.indiatimes.com

: Language entries

This message comes from newspapers, magazines and third-party websites. For more information, please check NewsDay Express Disclaimer.