The Union government tweaked the imposition of 20 per cent Tax Collection at Source (TCS) on transactions through international credit cards and debit cards under the Liberalised Remittance Scheme (LRS) from July 1 by clarifying that the applicability will only be after a limit of Rs 7 lakh has been
The Government has clarified that international debit or credit card payments of up to Rs 700,000 by an individual per year will be excluded from the Liberalised Remittance Scheme limits. This means that such transactions will not attract the Tax Collected at Source (TCS). , Economy News, Times Now
While the Union government has justified the hike in the tax collected at source on overseas credit cards claiming it mainly affects the rich, it is being criticised for burdening the middle class.
Spending in foreign exchange through international credit cards will be covered under the RBI’s liberalised remittance scheme (LRS), under which a resident can remit money abroad up to a maximum of $2.50 lakh per annum without the authorisation of the Reserve Bank, as per a Finance Ministry no
The finance ministry, in consultation with the RBI, has omitted Rule 7 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, thus including forex spending through international credit cards under LRS