Funnycontrol | TCS: Tax Comedy at Source

“What happens if I have 2 credit cards and I exceed Rs 7 lakh on one. How will the other bank know and what will it deduct?” (Image by Monstera via Pexels)

Yesterday I was in a Moneycontrol Twitter Spaces audio room where someone asked the question “How to escape from TCS?”

To which I wanted to ask: “Sir, are you a software engineer?”

It is of course ironical that the new TCS levy - tax collected at source on international credit card payments over Rs 7 lakh - is most likely to be collected from TCS employees. And it will be processed in the income-tax portal by Infosys, thus answering the question “where to escape from TCS?”

The internet has been agog with the new tax. Ironically whenever someone on Twitter complained about the steep 20% TCS, a WhatsApp University graduate would respond “It's only a TDS, bro. You can file return and get it back next year. Why, do you have something to hide?” To this I wanted to respond: “Sir, I will take away the door from your house and you get it back next year after filing form 12 Door F. Why you need door unless you have something to hide?”

They say the devil is in the details. And if we are talking about the budget 2023, then the devil lies in a small corner of the budget which introduced a 20% TCS on overseas remittances. This got far less attention than the Finance Minister’s Instagram reels.

People have been desperately seeking clarifications of what to do in case of overseas students needing funds if they will incur 20 percent TCS. Of course, if you have spent $100,000 on a philosophy degree, then you already have a 100% TCS on your career for life. Another pain point is for senior citizens incurring TCS on foreign remittances because they don’t file returns otherwise. Now they will have to file returns and hope the TCS comes before their life’s final returns are filed.

The finance ministry saw the ruckus being created on Twitter and started issuing some clarifications and reliefs.  Which means this country is now a Twitter democracy, so maybe you should spare that $8 for Twitter blue and the blue tick?

To be sure, wherever there is a law, it is your sacred duty as an Indian to find a loophole. And it is the sacred duty of the government to plug the loophole - if it hurts those who were not even in the loop in the first place, there can be clarifications and walk-backs later.

Speaking of loopholes, now there are questions. “What happens if I have 2 credit cards and I exceed Rs 7 lakh on one. How will the other bank know and what will it deduct?” asked Satish from Kota who has been studying for IIT IIM since birth. (The answer, if you are a typical middle-class India, is “biwi ke naam pe card lele”.)

Now many have told me to be careful about making jokes on financial announcements. Because if someone in government does not like me, they could always impose on me a 20 percent TCS, i.e., Tax Comedy at Source.