Black money in foreign travel: I-T dept to keep check

05:00 AM Feb 09, 2020 |

Indore: Union finance minister Nirmala Sitharaman has raised alarm bells for those who travel abroad on tour package booked by others, which is a common trend to oblige senior officials in government and private sector in the country.

From April 1, 2020, every foreign traveller will have to pay 5% (PAN holder) and 10% (non-PAN holder) TCS (Tax Collection at Source) on total amount of tour package. By paying TCS, every person will come on the radar of income tax department, which will be able to ascertain his or her income through their income tax returns (ITR).


At present, there is a provision in ITR to mention the passport number in prescribed column. But not many tax payers take it seriously. Even the tax consultants also don’t press their clients to fill the passport number if they visit abroad in the financial year. A large number of people go abroad on leisure trip several times in a year.


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Obviously, they use black money while paying tour package bill. In other cases, high ranking government and private sector officials make foreign tours with family for which other person or people make payment. This is because the latter seek undue favours from officials. And to oblige them, they finance overseas trips of officials, which is a bribe of sorts.

For the first time, such people will come under scrutiny. In the 2020-2021 union budget, Sitharaman has made provision to impose TCS on every foreign tour package bill amount. It means every foreign visitor whether he is an income tax payer or not, has to pay tax. However, there is a provision that if a person whose annual income is under threshold limit (under Rs 5 lakh) visits foreign country, then he will be eligible for TCS refund.

Analysing the provision, tax consultants say income tax department will be able to cross check the standard of living of an Indian who travels abroad through his ITR, which will reveal the actual income and his extravagance.

It will stop black money in overseas travel

Now, foreign travellers will have to pay 5% TCS on total travel package bill. This measure will bring those people on income tax department radar who frequently travel abroad and hide it in their ITR. Through data analytics, department will be able to assess actual income of foreign traveller. This is a challenging provision for government employees and their family members, doctors etc who visit abroad on sponsorship.

CA Swapnil Jain, Tax Practitioners Association, Indore, executive committee member



  • Every foreign traveller has to pay 5% and 10% tax collection at sources (TCS) on total amount of tour package

  • The practice of booking tour package by person who wishes to oblige influential people will stop

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