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20% TDS on international transactions

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Kochiro

Did banks start charging 20% TDS already or will it happen in April? I wonder why nobody is talking about it as it simply means if you invest 1000$ in US stocks, you will pay 200$ just to gov. Even if you try to keep track of international transactions to claim deductions, it will be a mess. We were worried about markup and now this. There is no lower limit on this 20% TDS so even if you do 1rs transaction, it will have 20% TDS.


Edit: Source : https://www.indmoney.com/articles/budget-2023-t...

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Deal Newbie Deal Newbie
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Those finer details of those rules are not finalised yet.

I fail to grasp the Even if you try to keep track of international transactions to claim deductions, it will be a mess. part though.
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Especially if you are trading in cryptos and other investment apps.

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Benevolent Benevolent
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Afaik for outside remittances above 7 lakhs a year,5% tcs was there.have they changed it? @getready @guest_999
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Changed it.

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Pro Community Angel Pro Community Angel
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W.r.t. Keeping a record of these transactions, its much easier these days with 26AS being made highly functional. 

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+1

also since two or threes years we can download complete financial data of Person ( AIS ) , using income tax website.. like how FD Income (NOT TDS) and from which bank etc..

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It's Amrit Kaal and don't ask questions.
Benevolent Benevolent
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wow. daylight robbery.

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dont comment without understanding the topic.
plz explain how it is robbery?
Pro Tech Guru Pro Tech Guru
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Isko koi pyaaz khilao 😡

Mobile Guru Mobile Guru
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Thread title needs a change. This is for outward remittances

Edit: Seems tcs applicable on online/offline debit/credit/forex card payments too (with few exceptions like Medical and education)

Pro Mobile Guru Pro Mobile Guru
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thank god education is spared! #ache_din 😄
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Shopping Friend Shopping Friend
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Can anybody confirm Is this true? I have a few SIP's going in Indmoney us stock & it will be pretty big hit and would have to stop it instantly if true

OP can you share an reference article on same?

Deal Lieutenant Deal Lieutenant
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https://www.indmoney.com/articles/budget-2023-t...

The Union Budget 2023 proposes a Tax Collection at Source (TCS) for foreign outward remittance under LRS (other than for Education and medical purpose) of 20% applicable from July 1, 2023. This will come into effect after the bill is passed. Before this proposal, the TCS of 5% was applicable on foreign outward remittances above INR 7 lakhs.

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Deal Lieutenant Deal Lieutenant
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I barely have enough to pay for the stuff, now 20% also i have to pay🤦‍♂️
Benevolent Benevolent
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Hope other countries don't follow same for transactions to India. Pura buisness hi band karvayenge yea log ..

Generous Generous
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Udhr border pr jawaan lad rhe hain desh k liye. Tum ye 20% b nhi de skte desh k liye. grinning

Benevolent Benevolent
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Paji middle class ki mehangai aur aam zindagi khilaaf ladai koi nahi dekhta
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Benevolent Benevolent
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To everyone having sip etc.outside India, + @EkdamSastaRaju i am pretty sure they will introduce a flat 15-25% tax on all foreign holdings soon so that we can only invest in atal pension yojna etc.
Pro Tech Guru Pro Tech Guru
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and Adani group stocks 😄
Deal Newbie Deal Newbie
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@PlaYITsmooTH can u suggest

Finance Mentor Finance Mentor
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Does this affect purchasing goods or services using foreign currency? Eg. Paying hosting / buying products from amazon.com etc.

Benevolent Benevolent
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No
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Seriously? 😢

Generous Generous
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Paji galat soch rhe ho.. @kukdookoo

Sahab chahte hai ki sare deshwasi paisa Swiss account me rakhe aur jab desh me lana ho to Adani ki tarah Mauritius se route kre. Nudge policy hai ye.. sabhi ko modern n smart banana chahte hain.

Benevolent Benevolent
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Paji russia pr lene ka kya process ha?
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Deal Cadet Deal Cadet
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Thanks, @kukdookoo Bhai, for tagging me.

I tried my best, but these terminologies and rates are very difficult for me to understand.

I just want to know from the knowledgeable Dimers involved in this topic _ whether the cost of hosting and domains is going to increase or not.. as @Seinfeld Bro mentioned.
Benevolent Benevolent
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It shouldn't, @getready and @Seinfeld paji 20% tcs is only if u remit money thru banks or apps. If you are paying via payment gateway then there is no tcs, as per the notification released till today.
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Deal Subedar Deal Subedar
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Even transferring funds for professional and educational purposes TDS will ve deducted?

Benevolent Benevolent
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@Kochiro @getready @Seinfeld @Snapz It's official only lrs not payment gateways, 2-4 things will have 5% above 7 lacs TCS rate for investment related overseas remittances through the Liberalized Remittance Scheme (LRS) is to be increased from 5% to 20% starting July 1, 2023.
Mobile Guru Mobile Guru
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Meaning-less changes then, just complicating money routing / foreign investments for non-experts
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Thanks for the thread. Firstly, as others suggested please mention in title it is on outward remittances which I think would make the scenario be clear smile .

Also then LRS doesn't seem attractive anymore since it already has conversion charges, forex difference between buy and sell, bank charges etc.

Would buying via international MFs or ETFs listed on BSE/NSE be considered as foreign outward remits ? (Looks like not but wanted to know if anyone has idea)

No opinion per se on the taxing but just a thought that maybe now LRS isn't a good investment since it doesn't seem to be beneficial except for high value investments and long term profits.

Glad they kept the current rates at least for education and medical purposes

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What do the experts say?

According to Sanjeev Sachdeva, partner at Luthra and Luthra Law Offices India, it seems that the analysis of the Centre has been that high net individuals (HNIs) are using the LRS scheme to transfer large amounts outside India, but their income tax payments and compliances have not been commensurate.

"The proposal is intended to ensure that such persons have discharged their IT liabilities suitably," he said.

Mobile Guru Mobile Guru
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This guy definitely doesn't sound like an expert. If center's target is HNIs alone, there's zero reasoning in removing the 7 Lakh threshold : 20% tcs applies to even 50K investment now and guess who will be affected by this? (HNIs / Experts always find ways)
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Comrade Comrade
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Upper middle class will take brunt of this as they would have to include transactions in itr

Generous Generous
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Support swadesi. Vocal for Local.

Don't invest in foreign countries. Invest in Adani/Patanjali 😄



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Deal Subedar Deal Subedar
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If I book an international tour with Makemytrip and pay via credit card will it still charge me 20% TCS?

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if transaction is in INR then no I guess
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