New TCS rule from next month: Three tips to reduce Tax Collected at Source on your foreign trip

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₹7 lakh. However, the 5% rate will continue to prevail if the total cost of the package is under ₹7 lakh. “It has been clarified by the government that the purchase of international travel tickets and hotel bookings on a standalone basis will not qualify as an Overseas Tour Program Package," said Archit Gupta, Founder and CEO, of Clear The government has also clarified that payments made overseas using one’s credit card will remain outside the purview of TCS for the time being.

Other payment modes, like debit cards, cash, and wire transfers will continue to attract TCS at the applicable rates, Gupta added. One can plan their outward remittances to minimize the TCS burden. With an example, Gupta explained that if a person has multiple outward remittances planned for the year for foreign travel, investment, education, and or medical purposes, then the first spend can be towards transactions attracting a higher rate of TCS viz, travel and investment and thereafter, remittance can be made towards education and medical purposes which attract a lower rate of TCS.

“This change means that limiting your total expenses to ₹7 lakhs would be a wise move to optimize your trip expenses," Abhishek Soni CEO and Co-founder Tax2win. Avoid Packaging of the Trip: Instead of opting for a bundled tour package, travelers can consider making standalone bookings for their overseas accommodation, travel tickets, and other relevant expenses before September 30, advised Soni. Buy Forex in Advance: It's advisable to refrain from last-minute currency exchange and, instead, purchase Forex in advance.