{"id":536,"date":"2020-09-16T11:51:37","date_gmt":"2020-09-16T11:51:37","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=536"},"modified":"2020-11-03T12:27:00","modified_gmt":"2020-11-03T12:27:00","slug":"indias-first-step-towards-taxation-on-foreign-remittance","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/indias-first-step-towards-taxation-on-foreign-remittance\/","title":{"rendered":"India\u2019s First Step towards Taxation on Foreign Remittance"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>The Indian administration has always been favourable\ntowards accounting every transaction in order to make the Indian financial\nsystem more systematic and achieve financial inclusion similar to the financial\nculture followed in western countries. In order to account all intra-country\ntransactions, the Modi-led government has approached public and private sector\nbanks to push customers for executing their all transactions right from paying\nfor grocery and recurring monthly payments to every business dealings. However,\nthe surveillance over the foreign remittances was difficult as taxpayers were\nnot displaying the foreign transactions while filing for income tax returns.<\/p>\n\n\n\n<p>To curtail the tax avoidance by assesses, the Indian\nadministration has introduced Tax collection at source (TCS) a new sub-section\n(1G) in Section 206C under Finance Act, 2020 which will be implemented from\nOctober 01, 2020. The introduction of new guidelines will bring taxes into the\nhands of government at the time of making payments, which will eradicate the\nhindrance of tax avoidance on foreign remittances and payments.<\/p>\n\n\n\n<p>The rookie sub-section (1G) has brought a tax bracket\nof 5% on foreign remittances made above 7 lakhs under Liberalized Remittance\nScheme drawn by Reserve Bank of India. The government has not left the foreign\ntour packages out of the purview and has inculcated them too into the tax\nbracket. However, the remittance made out of loan taken for higher education\nwill be taxed at 0.5%. Under the purview of Reserve Bank of India\u2019s liberalized\nremittances scheme, individuals cannot remit more than any amount of $250,000\nabroad every year. Moreover, individuals cannot buy and sell foreign exchange\nabroad and lottery tickets.<\/p>\n\n\n\n<p>How much you will be taxed: Supposed an individual\nmakes a foreign remittance of 15 lakhs. As per the Liberalized Remittance\nScheme of Reserve Bank of India, the individual will be liable to pay for 5%\n@(15 Lakhs minus 7 Lakhs = 8 Lakhs) which will result into Rs.40,000 as Tax\nCollected at Source (TCS) unless the tax is not deducted at source of the\nincome.<\/p>\n\n\n\n<p>The introduction of Tax Collection at Source (TCS) on\nforeign remittances will restrict the individuals who used to go on fancy\nforeign tours every spring but never paid taxes. This has been a major move by\nthe administration to get many tax evasion transactions accounted. Moreover, it\nwill help the government to understand deeply the spending pattern of individuals\ntowards foreign products. <\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 3,654<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"536\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">7    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>The Indian administration has always been favourable towards accounting every transaction in order to make the Indian financial system more systematic and achieve financial inclusion [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/indias-first-step-towards-taxation-on-foreign-remittance\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":537,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[160,161],"class_list":["post-536","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-foreign-remittance","tag-india"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=536"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/536\/revisions"}],"predecessor-version":[{"id":538,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/536\/revisions\/538"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/537"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}