5% tax on foreign funds transfer

 

According to online sources, from 1st Oct. 2020, the government of India has started charging tax on foreign funds transfer. Though there are certain conditions under which tax can be levied from 0.5% to 5%. The tax is levied on two types of foreign funds transfer:

To buy travel packages

For international study

In this article I will be discussing about the impacts on students going for international studies.

India is the world's second-largest source of international students and one of the fastest growing market. According to ministry of external affairs, around 7,25,725 students went abroad for international studies till 18.07.2018 and the number are increasing annually. This shows the scope of revenue in the form of tax for the government. Though there are some other issues that might contributed in the government's decision for implementation of taxes for the international studies. One could be the fact that most of the international students from India, belong to the middle or upper middle class families. This class usually do not fill ITR or if they do, they do not show actual income, according to some. Hence government might felt that despite lower income how such families can afford international studies for their children.

For education-related foreign remittance funded by loans, though, the tax will be 0.5% for the amount above Rs. 7 lakh, but will go up to 5% if PAN is not provided. Any amount sent abroad will attract a tax-collected-at source (TCS).

Let us understand this with an example:

An average annual fees for an international student in Canada is around $15,000/-. And living expense (GIC) is $10,000/-. In total, it is going to be around Rs.13,75,000/- by considering 1 CAD= 55 INR. The tax you will have to pay on your transfer will be around Rs. 3,375/- (with PAN) and Rs. 33,750/- (without PAN).

Rs. 13,75,000   -     7,00,000   =  6,75,000/-

Rs. 6,75,000 * 0.5% = Rs. 3,375/-

Rs. 6,75,000 * 5% = Rs. 33,750/-

Banks will automatically deduct the tax at the time of foreign transfer. It is an additional cost to be considered while planning for foreign studies. It is important to discuss with CA or tax lawyer before making any foreign payment. 

Impact on International Students and their families

In India, dream of foreign studies is famous among middle class families. Having a degree from the country like Canada, is not only the dream of students but also of parents for their children. Regardless of the their financial situation, everyone strives to get into the western world. And for such people, student visa is the first thing that comes into mind. Every parent put their hard earned money of their life to stake, just for their children's bright future. They even get ready to take loan or every possible way to send their children abroad. For such people, paying taxes means adding up their cost. This new tax can shake their budget completely.

Canada Is Sending Very Good Immigration Signals To The World.

Canada may be the most open country on the planet; but it has to shut its borders in response to pandemic COVID-19.

Canada government is working around the clock to neutralise the situation and normalise the Canadian life and Canadian Immigration to accommodate not only foreign nationals but also reuniting family members despite travel restrictions.

Government has taken steps in favour of International Students.

Government has taken steps to accommodate more international students in the country. Government has allowed new international students to come into the country who have study permit on or before 18^th March 2020.

In addition, international students can continue their study through online system either from their native country or from Canada. However the condition is made; online study should be in response to COVID-19.

Moreover, Students need not to worry about their online study. Their study will be counted and make them eligible for Post Graduate Work Permit program. However the condition is made; online study should be in response to COVID-19.

What’s a next, International student who have study permit, or who were approved for a program starting in month of May or June, but who are unable to study due to travel restrictions. International students can start their classes while outside Canada and cover up to half of their program while abroad if they cannot travel to Canada.

SURPRISING RESULTS FOR Q1 2020 EXPRESS ENTRY

Number of candidates invited to apply for permanent residency in Quarter 1 of 2020 is surprisingly more than that of first quarter of last two years.

According to sources, by this time in 2019, Canada had issued 21,200 ITAs, and in 2018, Canada had issued 17,500 ITAs. But in 2020 the number of ITAs issued is 22,600.

Despite the efforts of minimising the impact of coronavirus; IRCC tweeted that the Express Entry rounds are still happening and they will be accepting and processing the applications. The processing time of application may exceed the duration of six months.

FLAGPOLING IS NO MORE OPTION IN CANADA. UPDATE!

Impact of Coronavirus can be seen in various forms everywhere around the world. One of those impact has come in form of stopping the flagpoling technique of renewing study permit, work permit or permanent residence application.

With the aim of limiting the impact of coronavirus in the country; the Canadian government has decided to stop the flagpoling of the application. This is a bad news for most of the foreign nationals, as it was considered one of the best and shortest way for renewal of study permit or applying for work permit or most of people used to convert their visitor visa to work permit using flagpoling technique.

What is Flagpoling?

Flagpoling in Canada is a technique to renewing of your work (or study) permit by leaving Canada at a  border crossing with the USA, and re-entering, sometimes immediately.

Why is it famous among applicants?

Bypass processing time: When an applicant applies for the visa through the visa office, the processing time can be very lengthy depending upon the work load and other factors like type of visa. In flagpoling, applicants interacts with the officer physically.  If all the documents are at the right place, the officer gives his decision instantly.
Easier application process: Biggest advantage of flagpoling is, you hand over documents to the officer unlike other technique of visa filing like online submission or at the visa office. Therefore visa application is processed while you are physically present. If something is missing like documents or less paid fees, the officer will let you know and can be rectified at the moment.
You can make your points beyond the contents of your application: When you are flagpoling, you interact the officer physically. Hence you can clear the doubts of the officer regarding any doubts on your application.  

Importance of ICCRC member in applying Canadian Visa

When someone wants to visit another country; it is important to get visa for it. Applying and getting visa is an art. According to government of Canada, only ICCRC members and Canadian Immigration Lawyers are authorised to apply for visa to Canadian Immigration. 

Who are ICCRC members?

ICCRC members are the licenced immigration advisers of Canada. They have all required skills and authorised to practice immigration matters according to the government norms. 

Impact of Coronavirus on Parents And Grandparents Program. Update!

Due to coronavirus pandemic, IRCC will delay the opening of 2020 Parents and Grandparents  Program to accepting new applications.

According to online sources, the priority of whole-of-government is combat the pandemic. Government will launch annual call for expression of interest in coming weeks; as the conditions normalise. 

Government of Canada is strongly committed to family reunification, and IRCC is committed to opening the program as soon as possible.

Will your Canadian College or university help you in PGWP?

Are you planning to move to Canada for your higher studies? Do you have plans to settle in Canada after your studies? If answer is Yes, this post is for you.

There are numerous colleges and universities in Canada. All institutions can not help you in getting your Post Graduate Work Permit after your program completion. There is a list of Canadian Government, where you can actually check your college or university status.

Here are the steps to check if your college or university is eligible to help you in getting Post Graduate Work Permit:

1. Open Google on your Web Browser.
2. Type DLI list Canada in search box.
3. Open the link of canada.ca from the search results.
4. Scorll to the bottom of the page and click on Make your selection.
5. Select province in which your college is located.
6. You can either type your college name in search box or choose from drop down list.
7. You will find complete detail of your institution here.