The Central Board of Direct Taxes ( CBDT ) has relaxed the provisions of TCS under section 206C(1G) of the Income Tax Act, 1961 in respect of non-resident individuals visiting India
Section 206C (1G) of the Income Tax Act, 1961 provides for the collection of tax by a seller of an overseas tour program package from a buyer, being a person purchasing such package, at the rate of 5% of the amount of the package.
Representations were received from domestic tour operators who were facing difficulties in the collection of tax from non-resident individuals visiting India who were booking overseas tour packages from such domestic tour operators. Since such persons may not have a PAN, tax is required to be collected at higher rates. Further, such non-residents may find it difficult to furnish their ITR and claim refunds.
In order to remove such difficulties, the Central Government, in the exercise of powers conferred under section 206C(1G) of the Act, has specified that the provisions of the said section shall not apply to a buyer being an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6 of the Act and who is visiting India. Hence, a domestic tour operator is not required to collect tax on the sale of overseas tour packages to non-resident individuals visiting India.
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