Minus education fees and health expenses, money sent abroad for any other purpose will now attract a steep 20% tax collected at source (TCS). The upfront payment can be recouped when you file your income tax returns.
So, whether you send expense money to your child abroad, or buy a house overseas or opt for a foreign tour package or invest in global stocks and bonds, you will need to factor in the 20% TCS — a rule that could potentially impact your cash flows.
Finance secretary TV Somanathan didn’t leave any doubt: the provision is to plug a “leakage”. As he said, several wealthy Indians were buying property in Manhattan or investing overseas but their tax returns often did not reflect the true income.
Revenue secretary Sanjay Malhotra said the 20% TCS rate was close to top tax rates because those sending money overseas are high earners.
So, whether you send expense money to your child abroad, or buy a house overseas or opt for a foreign tour package or invest in global stocks and bonds, you will need to factor in the 20% TCS — a rule that could potentially impact your cash flows.
Finance secretary TV Somanathan didn’t leave any doubt: the provision is to plug a “leakage”. As he said, several wealthy Indians were buying property in Manhattan or investing overseas but their tax returns often did not reflect the true income.
Revenue secretary Sanjay Malhotra said the 20% TCS rate was close to top tax rates because those sending money overseas are high earners.
