New Income Tax Rules: Parents Can Now Claim TCS Credits for Children’s Foreign Education
The Central Board of Direct Taxes (CBDT) has updated income tax rules, allowing taxpayers to claim Tax Collected at Source (TCS) credits on behalf of someone else. This is a significant development for families bearing the cost of foreign education or travel.
Key Highlights:
TCS Credit Transfer: The new rules allow parents or guardians who pay TCS on tuition fees or other educational expenses for their children abroad to claim the TCS credit in their own tax filings.
Previous System: Previously, only the individual for whom the payment was made could claim the TCS credit. This change reduces the financial burden on parents, allowing them to manage their tax liabilities more effectively.
Threshold for TCS: TCS applies if foreign remittances exceed ₹7 lakh. A 5% TCS is levied on such remittances, which can now be claimed by a different individual under the new rules.
How to Claim TCS Credit:
- Declaration Submission: The individual who made the payment (collectee) must submit a declaration to the tax collector (such as a bank or institution collecting the TCS).
- Information Required:
Name and address of the person claiming the credit.
PAN of the recipient (parent or guardian).
The amount of TCS paid.
This update is set to ease the financial strain on families supporting children’s education abroad.
IncomeTaxUpdate #TCSCredits #ForeignEducation #TaxSavings #ParentsTaxClaim #CBDT #TCSRules #StudyAbroad #TaxRelief
