Govt. trying to link TCS on overseas spends to local TDS to smoothen cash flows: CEA

The government is making attempts to link the tax collection at source (TCS) payments made by individuals to the taxes deducted from their income sources, so that the new 20% TCS norms for certain international spends don’t affect cash flows, Chief Economic Advisor (CEA) V. Anantha Nageswaran indicated on Thursday. 

Responding to concerns about the 20% TCS levy on international credit card spends to be introduced from July 1, the CEA said that exempting transactions on debit and credit cards up to ₹7 lakh a year would mean “bulk of the transactions made by most of us will not be covered by the levy”. 

“There are also attempts to link your TCS to the TDS deductions made, so if there are TCS payments made by you, it should reflect in a lower TDS as a method to make sure that you are not affected as far as cash flow is concerned. That will also provide a huge amount of relief for people who are concerned about this annoyance or irritation of seeing a TCS apart from your TDS,” Mr. Nageswaran said at the Confederation of Indian Industry’s annual session. 

While the pass-through of TCS into TDS deductions will ensure ordinary taxpayers will not face problems, the CEA emphasised the need for a 20% levy as a deterrent effect for a large number of people who are evading taxes of “substantial volumes” through this mechanism, as per government data.    

“One point of view is that you could have made it 1% or 5% if you wanted to track it. But there are people who are happy to stay out of the tax net even if 5% is deducted, so there has to be a deterrent effect at the same time without inconveniencing people, those who are paying the taxes,” he emphasised. 

For all the latest business News Click Here 

Read original article here

Denial of responsibility! TechAI is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.