In a bid to widen and deepen the tax net, the government has proposed to amend Section 206C of the I-T Act to levy five per cent TCS (tax collected at source) on overseas remittances and for sale of overseas tour package.
According to the Budget documents, an authorised dealer receiving an amount or an aggregate of amounts of Rs 7 lakh or more in a financial year for remittance out of India under the Liberalised remittances Schemes (LRS) of the Reserve Bank of India, will be liable to collect TCS, if he receives sum in excess of said amount from a buyer — a person remitting such amount out of India — at the rate of five per cent. In non PAN/Aadhaar cases, the rate will be ten per cent.
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Similarly, a seller of an overseas tour programme package who receives any amount from any buyer — a person who purchases such package — will be liable to collect TCS at the rate of five per cent. The rate will be ten per cent in non-PAN and non-Aadhaar cases.
Overseas tour programme package is defined as any tour package which offers visit to a country or countries or territory or territories outside India, and includes expenses for travel or hotel stay or boarding or lodging or any other expense of similar nature, the Budget documents state.
Further, it has also proposed a new levy of TDS at the rate of one per cent to be paid by a e-commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.
Tax on NRIs
Non-resident Indians (NRIs) not paying taxes in any foreign country will now be taxed in India, according to a Union Budget proposal. The Budget has also proposed to reduce the period of stay in India to 120 days from 182 days earlier for persons of Indian origin (PIOs) to be categorised as NRIs.
As of now, if an Indian or a person of Indian origin managed his stay in India such that he remained a non-resident in perpetuity, he was not liable to pay tax on his global income in India. The government has now proposed to introduce a deeming provision that every Indian citizen who is not liable to tax in any other country, pby virtue of his domicile or residence, will be deemed as a resident of India. Consequently, his global income would be taxable in India.
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