What Does The 2020 Union Budget Say For Indian Travellers?

Finance Minister Nirmala Sitharaman, on February 1, 2020 announced the Union Budget. So let’s see how’s the tourism sector looking this year. By Tanvi Jain

To begin with, she announced the allocation of funds worth INR 2,500 crore for the Ministry of Tourism, and of INR 3,150 crore for the Ministry of Culture 

Stressing upon the development of archaeological sites with on-site museums, she also proposed to set up Indian Institute of Heritage and Conservation under the Ministry of Culture, with a status of deemed university. Rakhigarhi in Haryana, Hastinapur in Uttar Pradesh, Shivsagar in Assam, Dholavira in Gujarat, and Adichanallur in Tamil Nadu, are five iconic archaeological sites with on-site museum. She also announced renovation of four more museums across the country. 

Another announcement mentioned setting up a tribal museum in Ranchi, Jharkhand, a maritime museum in Lothal — a Harappan age maritime site — near Ahmedabad under the Ministry of Shipping. 

Not only did she reiterate, Prime Minister Narendra Modi’s January 2020 announcement of re-curation of country’s oldest Indian Museum in Kolkata, but also spoke about Numismatics and Trade Museum to be located in the historic Old Mint Building in Kolkata. 

She further revealed government’s plans to set up 100 more airports by 2025 under the Regional Connectivity Scheme, also known as UDAN. Welcoming the announcement, experts viewed it as a step that will not only increase domestic tourism, but will also revive the unexplored destinations of India.  

However, the budget didn’t prove to be very fruitful for international travellers, as a proposal was made to include International tour packages under the tax collected at source (TCS) regime, which could make international tours costlier by five per cent.  

How? Well according to this proposal, a seller of overseas tour package is liable to collect five per cent TCS from PAN/ Aadhaar Card holders, and 10 per cent otherwise. 

Current TCS norms apply to tour operators who buy overseas tour packages and pay to the package providers, but with this proposal, five per cent of the amount collected from the customers will be given to government as revenue for overseas tour package. 

This gives foreign exchange dealers the authority to collect five per cent income tax on payment of over INR 7 lakh, under the liberalised remittance scheme of the Reserve Bank of India. Now, Indians travelling abroad or intending to send money overseas, will have to pay five per cent more than the cost.  

Moreover, one will have to pay TCS at the same rate even if he/she has to send money to children abroad, buy property or anything else abroad. 

On an average, Indians reportedly send approximately INR 10,700 crore per month abroad, but with this tax, it will increase it to approximately INR 5 billion.  

Related: Dekho Apna Desh: Visit 15 Indian Destinations In A Year And The Ministry Of Tourism Will Fund Your Trips!

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