InvestorQ : What is going to be the final impact of the TDS and TCS on foreign payments that is effective from October 01?
Archita Jajjoo made post

What is going to be the final impact of the TDS and TCS on foreign payments that is effective from October 01?

Answer
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Niti Shenoi answered.
4 weeks ago


CBDT issued detailed clarification pertaining to new TDS / TCS provisions to be applicable from October 1. It has widened the scope of TCS provisions to cover the sale of goods, sale of overseas tour packages and overseas remittance of funds under the RBI Liberalised Remittance Scheme or LRS.

CBDT also introduced a new provision under section 194-O which effectively mandates that now e-commerce operators will be required to deduct TDS at 1% in respect of the amount of any sale of goods and services happening on their online portals. A detailed list has been issued by CBDT.

The most controversial could be the TCS on foreign remittances. Under the new modified Act, 5% TCS would be applicable on amounts exceeding Rs.7 lakh in a financial year for foreign remittances under the LRS. Such TCS will be restricted to 0.5% if it pertains to education loan payments.

The 5% TCS on purchase of overseas tour packages will be applicable irrespective of the value of the package. There will also be TCS of 0.1% if the sale of goods is over Rs.50 lakh in a year. Companies will have to file returns by the 10th of next month.