India: Guidance on withholding tax on purchases of overseas tour packages and foreign remittances
FAQs regarding implementation of increase in withholding tax on purchases of overseas tour packages and foreign remittances
Guidance on withholding tax on purchases of overseas tour packages and foreign remittances
The Central Board of Direct Taxes (CBDT) issued frequently asked questions (FAQs) regarding the implementation of the increase in the withholding tax under the Finance Act, 2023 (from 5% to 20%, effective 1 July 2023) on purchases of overseas tour packages and foreign remittances under the Liberalised Remittance Scheme (LRS).
The Finance Act, 2023 also removed the threshold of INR 7 lakh for triggering withholding tax on foreign remittances under the LRS. Both withholding tax changes with respect to foreign remittances under the LRS are not applicable when the remittance is for education or medical purpose.
The Ministry of Finance also issued a notification to implement changes relating to use of international credit cards.
Read a July 2023 report [PDF 274 KB] prepared by the KPMG member firm in India
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