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G1-G9 filing ASP/GSP solution
Elevate processes with AI automation and vendor delight
Streamline vendor management and collaboration in one unified portal
Optimise ITC for profitability
Bulk invoicing within any ERP
e-TDS return filing solution
Maximise EBITDA with early vendor payments
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Automated secretarial compliance
Connected finance ecosystem for process automation, greater control, higher savings and productivity
GST and direct tax compliance
Complete supply chain solution for ultimate control, effortless collaboration, and assured compliance
File your taxes in 3 minutes
ITR filed by India's top tax experts
Your Taxes, Handled by India’s Best Experts
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If you travel abroad frequently or are planning your first trip, it’s important to understand the TCS (Tax Collected at Source) on tour packages. According to the Liberalised Remittance Scheme(LRS) of RBI, resident individuals (including minors) can remit funds outside India with ease under a permissible limit. To regulate the foreign remittances, TCS (Tax Collected at Source) is collected by the sellers on all payments exceeding Rs. 10 Lakh from the buyer. The sellers then deposit TCS to the government. In this article, we will discuss in detail the TCS on tour package.
Overseas Tour Package includes the travel expenses for travelling abroad, hotel accommodation and other expenses. Travel tickets alone or accommodation expenses do not qualify for an overseas tour package.
Section 206C(1G) of Income tax act, 1961 mandates overseas tour package operators to collect TCS from the individuals travelling abroad. As announced in budget 2025, the threshold limit of remittances (under LRS) made to overseas tour package sellers has increased to Rs. 10 lakh from 7 lakh.
Under Finance Act 2025, the applicable TCS rates are 5% and 20%.
The limit of Rs 10 lakhs need to be reckoned for the whole financial year, not per package.
The buyer usually provides an undertaking to the tour operator related to payments already made to other operators, during the financial year. The seller can rely on the undertaking for determining the applicable TCS rate.
When resident individuals (buyers) buy overseas tour packages, TCS gets collected by the foreign tour package operators (sellers) at a prescribed rate. The seller deposits TCS to the government within the specified dates. Payment in Indian rupees on booking with domestic online travel portals like MakeMyTrip, Yatra.com also qualifies for TCS collection.
Seller has to submit quarterly TCS returns, Form 27EQ to the government within the due dates.
The following are the TCS exempted buyers:
Note: No TCS if buyer has deducted TDS under any section.
TCS on overseas Tour Package is a regulatory measure to ensure transparency on Foreign travel remittances. Both the buyer and seller need to know about the recent TCS rates so that they can know about the amount of taxes that need to be paid and collected. The seller of the tour package program should file for TCS returns within the due dates. The buyer can also claim for the TCS refund on filing his income tax returns.
It was introduced in the Budget 2020. It was made applicable from 1st October 2020.
TCS rate for overseas tour package is 5% on remittances up to Rs. 10 lakh and 20% on foreign tour package in excess of Rs. 10 Lakh.
Yes, TCS is refundable upon filing an income tax return.
Yes, Individual flights, hotels, and other travel expenses exceeding Rs.10 Lakh are subject to 20% TCS.
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