Recession, really? Indians splurge record $10 billion on foreign trips this fiscal

Foreign Travel

India seems to be an outlier in the league of big economies amid all talks of gloom around the world. As per the latest data released by the Reserve Bank of India (RBI), Indians have spent a record $10 billion in overseas travel in the first nine months of this fiscal.

Between April and December 2022, Indians shelled out $9,947 million, surpassing the previous record of $7 billion in before the pandemic, according to a Times of India report.

Indians splurged $1,137 million on travel in December 2022 alone, as per the RBI data.

They have doled out Rs $19,354 million this fiscal if forex reserves spent on education, maintenance of relatives, gifts, and investments are taken into account.

As per the report, Indians are now spending nearly $2 billion on a monthly average as against less than a billion dollars in remittances until FY18.

The Centre in Budget 2023 has proposed to sharply increase the tax collected at source (TCS) rate on money sent overseas under the Liberalised Remittance Scheme to 20 percent from 5 percent.

For the benefit of students studying abroad and those opting for medical treatment, the TCS rate has been kept untouched at 5 percent of the amount remitted. But investments, gifts, and foreign tours exceeding Rs 7 lakh in a year would be impacted starting July 1, 2023.

TCS is not an additional tax. It is similar to TDS – tax deducted at source - and is credited to your account with the authorities and adjusted against your tax liability.