Overseas travel loans and credit options see huge demand – News


Many finance companies offer the option of paying in equivalent monthly installments

By HP Ranina

Published: Sat 3 Sep 2022, 5:05 PM

Question: My son who works in India wants to go on holiday abroad. He has practically no savings because he has just started working, but he wants to take out a loan. Do banks or finance companies provide loans for overseas travel? I’m not so sure.

Some well-known travel agencies themselves provide short-term credit to their customers under the “Buy Now, Pay Later” scheme. Many young professionals take advantage of this loan to travel abroad.

Banks and financial institutions are also extending credit facilities to their known customers by partnering with fintech companies. Loan repayment is spread over three to thirteen monthly installments. The average transaction size for an international travel loan is currently Rs 150,000.

Some travelers use their credit card option to finance their trip abroad. Many finance companies offer the option of paying in equivalent monthly installments. Over the past year, overseas travel loans and credit options have increased sevenfold

When my relatives seek treatment in the hospital, they usually spend a large amount of cash both to pay hospital bills and to buy medicine. Is there a risk from government authorities, especially from tax and exchange regulators?

All hospitals and medical institutions in India are required by the tax authorities to obtain the permanent account number when a patient is admitted. The tax authorities recently found that this legal requirement was not respected because hospitals consider that in many cases the patient is admitted on an emergency basis and therefore cannot produce the required document. As a result, these institutions are being investigated and patient records have been collected. The authorities under the tax laws take these breaches very seriously. The tax authorities have the power to consider as hidden income any cash expenditure incurred which cannot be justified by the amount of income declared in the tax declarations.

Such unexplained expenses are treated as exempt income under Section 69-C of the Income Tax Act and where the source of such expenses cannot be explained with respect to the income declared in the income tax return, unexplained expenses are taxed at the flat rate of 60 percent under Section 115-BBE. The tax authorities say they have collected a lot of information and have compiled a database on people suspected of tax evasion following large cash expenditures. Therefore, it is better to pay hospitals, hotels, etc. by debit/credit card in order to avoid any unwanted action.

The number of electric vehicles, cars and two-wheelers, is growing by leaps and bounds. However, concerns remain about the quality of the batteries used for these vehicles. Are protective measures taken to prevent fires and other accidents?

The Ministry of Road Transport proposes mandatory standards for battery components. Guidelines are issued for testing cells and other components. Companies that fail to comply with these regulatory norms and standards will face penalties. The standard and test protocols must be notified simultaneously for two-wheeled and four-wheeled electric vehicles. Car manufacturers will be legally obliged to use only batteries that comply with the standards. In order to ensure that these guidelines and standards are met, investigating authorities will obtain random samples of finished batteries from the factories to verify whether the required standards are met. Therefore, strict measures are taken to minimize the possibility of accidental fire or accident.

HP Ranina is a practicing lawyer, specializing in tax management and foreign exchange laws of India. The opinions expressed are his own and do not reflect the policy of the newspaper.


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