Section 206C requires the collection of tax by the seller from certain transactions like the sale of alcohol, liquor, forest produce, scrap, and so forth. Sub-section (1G) of Section 206C requires tax collection on foreign remittances made under the Liberalised Remittance Scheme (LRS) and on the sale of Overseas Tour Program Packages (OTPP). The Finance Act 2023 has brought substantial changes in the provisions related to the collection of tax at source under section 206C(1G). It amended the provisions of Section 206C(1G) as follows (effective from July 01, 2023): ‣ The threshold limit of Rs. 7 lakhs in respect of remittance under LRS is to be removed; ‣ TCS rate in respect of remittance under LRS and on the sale of OTPP is increased from 5% to 20%; ‣ 5% TCS shall apply if remittance is for education or medical treatment [first proviso to Section 206C(1G)]; and ‣ Tax is to be collected when the remittance is for education or medical treatment and the aggregate of remittance exceeds Rs. 7 lakhs [second proviso to Section 206C(1G)]. In response to the comments and suggestions submitted by the Stakeholders, the Govt. has decided to change the TCS provisions. The Govt. has released a press release announcing several changes to Section 206C(1G). This article briefly analyses the changes introduced in Section 206C(1G) and the TCS rates applicable to various remittances.

Finance Minister Nirmala Sitharaman presented the Interim Budget for 2024-25 in the Parliament on February 01, 2024. No significant tax announcements were proposed, with only a few necessary proposals introduced concerning Income Tax and GST. The changes proposed in the Finance Bill 2024 about the Income-tax Act have been discussed in this article, which includes: ‣ TCS provisions proposed to be amended to align them with the Govt.'s Press Release ‣ Extension of sunset dates under various provisions ‣ Withdrawal of small outstanding direct tax demands

The Lok Sabha passed the Finance Bill 2023 on March 24, 2023. The Bill has been passed with more than 60 changes compared to the Finance Bill introduced on February 01, 2023. New amendments have been made, and some proposed amendments have been modified. In this special write-up, Taxmann's Advisory and Research team has prepared snippets of all changes (both Income-tax & GST) made in the Finance Bill, 2023, as passed by the Lok Sabha viz-a-viz the Finance Bill, 2023. The changes include: ‣ Changes Related to Income-Tax 1. Marginal relief to a resident individual opting new tax scheme [Section 87A] 2. Scope of Section 50AA is expanded to cover specified mutual funds 3. Change in the tax rates on specified income of non-residents [Section 115A] 4. TDS provision under Section 194BA on winning from online games is effective from 01-04-2023 5. Section 206AB (non-filer of ITR) will not apply in respect of TDS on winning from online games 6. Reference of Section 194BA is given in the meaning of "rates in force" in Section 2(37A) 7. Exemption to be available to a "Sikkimese woman marrying a non-sikkimese" and an "Individual domiciled in Sikkim" [Section 10(26AAA)] 8. Exemption to income of credit guarantee trusts/funds 9. Insertion of reference of Section 10(23EC) in Section 11(7) 10. Meaning of the original fund expanded 11. Exemption from capital gains on transferring the interest in a JV by a Public sector company in exchange for shares in a foreign company [Section 47(xx) and Section 49(2AI)] 12. Unit of IFSC allowed opting for tonnage tax scheme after claiming Section 80LA deduction [Section 115VP] 13. 100% deduction in remaining five years to income of Offshore Banking Units [Section 80LA] 14. No surcharge and cess to be levied on income from securities held by specified fund referred to in Section 10(4D) 15. New TCS rate under Section 206C will apply even if the remittance is made under LRS within India 16. TCS rate shall not exceed 20% if the collectee does not furnish his PAN or is a non-filer of income-tax return 17. A new rate of TDS from interest on a long-term or rupee-denominated bond listed on a recognised stock exchange located in an IFSC introduced [Section 194LC] 18. Scope of exemption has been expanded to the income received by a non-resident from specified activities carried out by a specified person [Section 10(4G)] 19. Exemption to non-residents or IFSC units on the transfer of shares of a domestic company engaged in aircraft leasing business in IFSC [Section 10(4H)] 20. Tax exemption for inter-corporate dividend distribution within IFSC Units engaged in the aircraft leasing business [Section 10(34B)] 21. "Specified" sum received from business trust to be taxable as residuary income ‣ Changes Related to GST and Custom 22. Levy of IGST and GST Compensation Cess on the removal of imported goods to the warehouse for further manufacturing/processing 23. Amendment relating to GST Appellate Tribunal 24. Removing the requirement of compulsory registration where the Government grants exemption through notification 25. Extension of time limit to apply for revocation of cancellation of registration from 30 days to 60 days 26. Increase in the time period for filing a return before initiation of best judgment assessment 27. Place of supply in case of services of transportation of goods where the location of supplier/recipient is outside India 28. Specific tax-based levy of GST compensation cess on commodities like pan masala, tobacco, etc. 29. Changes in Customs Duty Rates relating to a few items

This book provides complete and accurate information about all provisions of the Foreign Exchange Management Act 1999 (FEMA). It also includes guidance on practical issues faced by companies and FEMA professionals. This book will be helpful for Companies dealing with foreign exchange, FEMA professionals, Legal and financial advisors, and Students and academicians in financial law. The Present Publication is the 21st Edition & amended up to 30th June 2024. This book is authored by Taxmann's Editorial Board with the following noteworthy features: • [Topic-wise Commentary] The book provides a detailed commentary on over 50 topics, providing in-depth insights and explanations to enhance the reader's understanding • [Comprehensive Analysis] It includes the analysis along with relevant rules, judicial pronouncements, circulars, notifications, and master directions issued by the Reserve Bank of India, ensuring a well-rounded perspective on the subject • [Focused Guides] Special guides on topics such as Liberalised Remittance Scheme (LRS) and Overseas Investment are provided, providing targeted information • [Legal Context] The book also covers laws related to the following: o Prevention of Money Laundering Act (PMLA) o Foreign Contribution (Regulation) Act (FCRA) o Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) The coverage of this book is as follows: • FEMA – Overview o An introductory chapter that sets the stage by explaining the fundamental principles and objectives of FEMA, offering a bird's eye view of the act • Authorised Person o Discusses the roles and responsibilities of authorised persons under FEMA, including their regulatory obligations and operational guidelines • Accounts in India by Person Resident Out of India o Provides detailed procedures and regulations for maintaining accounts in India by non-residents, encompassing various account types and compliance requirements • Accounts of Indian Residents in Foreign Currency o Explains the norms and guidelines for Indian residents holding foreign currency accounts, including the conditions and permissible transactions • Receipt and Payment in Foreign Exchange o Covers the rules and regulations governing the receipt and payment in foreign exchange, detailing the procedural and compliance aspects • Realisation, Repatriation and Surrender of Foreign Exchange o Elaborates on the obligations related to the realisation, repatriation, and surrender of foreign exchange earnings • Money Changing Activities o Provides an overview of money-changing activities, including licensing requirements, operational guidelines, and compliance issues • Money Transfer Service Scheme (MTSS) o Discusses the MTSS, including its regulatory framework, permissible transactions, and operational guidelines. • Possession and Retention of Foreign Currency o Explains the regulations related to the possession and retention of foreign currency by residents and non-residents • Export and Import of Currency or Currency Notes o Details the rules governing the export and import of currency and currency notes, including limits and reporting requirements • Remittances on Current Account o Discusses the permissible current account transactions and the procedural requirements for making remittances • Liberalised Remittance Scheme (LRS) o Provides an in-depth guide on LRS, including eligibility, permissible transactions, limits, and reporting requirements • Export of Goods and Services o Covers the procedural and regulatory aspects of exporting goods and services from India, including documentation and compliance • Import of Goods and Services o Details the regulations governing the import of goods and services, including the procedural requirements and compliance issues • Project Exports and Service Exports o Discusses the regulatory framework for project and service exports, including guidelines and compliance requirements • Foreign Exchange Rates o Provides an overview of the determination and regulation of foreign exchange rates, including the role of the RBI • Overview of Capital Account Transactions o Explains the principles governing capital account transactions under FEMA, including permissible transactions and compliance requirements • Foreign Investment in India o Offers detailed guidelines on foreign investment in India, including regulatory approvals and compliance • FDI in Indian Company o Discusses the procedures and regulations for Foreign Direct Investment (FDI) in Indian companies, including sector-specific guidelines • Sector-wise FDI Policy at a Glance o Provides a summary of FDI policies across various sectors, highlighting key regulations and compliance requirements • FDI – Downstream Investment, i.e. Indirect Investment o Explains the norms for downstream or indirect investment by foreign entities in India • FDI through Rights, Bonus, Sweat Equity or Merger/Amalgamation o Discusses the regulatory framework for FDI through rights issues, bonus issues, sweat equity, and mergers/amalgamations • FDI – Transfer of Securities o Details the procedures and regulations for the transfer of securities involving FDI • FDI in LLP o Provides guidelines for Foreign Direct Investment in Limited Liability Partnerships (LLPs) in India • FDI in GDR/ADR o Discusses the norms for FDI through Global Depository Receipts (GDR) and American Depository Receipts (ADR) • Investment by NRI or OCI o Offers guidelines for investments in India by Non-Resident Indians (NRI) or Overseas Citizens of India (OCI) • FDI in a Startup Company o Discusses the regulatory framework for FDI in Indian startup companies • Investment by Foreign Portfolio Investor o Provides an overview of the regulations governing investments by Foreign Portfolio Investors (FPI) • FDI in Investment Vehicle o Explains the norms for FDI in investment vehicles such as Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) • FDI by FVCI o Discusses the regulatory framework for FDI by Foreign Venture Capital Investors (FVCI) • FDI – Investment in Securities by Funds, Foreign Central Bank, etc. o Provides guidelines for FDI through investments in securities by foreign funds, central banks, and other entities • Overseas Investment by an Indian Entity o Offers a detailed guide on overseas investments by Indian entities, including regulatory approvals and compliance • Guarantees o Discusses the regulatory framework for providing and receiving guarantees under FEMA • Insurance o Explains the norms for foreign investment in the insurance sector in India • Borrowing and Lending in Foreign Currency o Provides guidelines for borrowing and lending in foreign currency under FEMA • Borrowing and Lending in Indian Rupees o Discusses the regulations governing borrowing and lending in Indian Rupees involving foreign entities • Foreign Investment in Debt Instruments o Provides an overview of the norms for foreign investment in debt instruments in India • External Commercial Borrowings o Discusses the regulatory framework for External Commercial Borrowings (ECB), including eligibility and compliance requirements • Trade Credit (TC) and Structured Obligations o Explains the regulations for trade credit and structured obligations under FEMA • Acquisition and Transfer of Immovable Property in India o Provides guidelines for the acquisition and transfer of immovable property in India by non-residents • Acquisition and Transfer of Immovable Property Outside India o Discusses the norms for Indian residents acquiring and transferring immovable property outside India • Remittance of Assets o Explains the procedures for the remittance of assets under FEMA • Branch/LO/Project Office in India by Foreign Entities o Discusses the regulatory framework for setting up and operating branch, liaison, or project offices in India by foreign entities • Indian Depository Receipts o Provides guidelines for the issuance and regulation of Indian Depository Receipts (IDR) • Risk Management and Inter-Bank Dealings o Explains the norms for risk management and inter-bank dealings under FEMA • Vostro Account for International Trading o Discusses the regulatory framework for Vostro accounts used in international trading • Industrial Policy of Government of India o Provides an overview of the industrial policies of the Government of India impacting foreign exchange management • Enforcement of FEMA o Discusses the enforcement mechanisms for ensuring compliance with FEMA • Penalties under FEMA o Provides guidelines on the penalties for contraventions under FEMA • Appeals under FEMA o Explains the procedures for appealing against orders under FEMA • Compounding of Contraventions under FEMA o Discusses the process for compounding contraventions under FEMA • Prevention of Money Laundering Act o Provides an overview of the PMLA and its relevance to FEMA • Foreign Contribution (Regulation) Act (FCRA) o Discusses the regulatory framework for foreign contributions under the FCRA • COFEPOSA, 1974 o Provides guidelines on the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 • International Financial Services Centre (IFSC) o Discusses the regulations governing the IFSC and its role in foreign exchange management