NEW DELHI: Government on Friday said no TCS extension will be levied on international spending up to Rs 7 lakh annually using debit or credit cards.
“Concerns have been raised about the applicability of Collection of taxes at source (TCS) to small transactions under the Liberalized remittance scheme (LRS) from 1 July 2023. To avoid any procedural ambiguity, it has been decided that any payment by an individual using their international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and therefore, it will not attract any TCS,” the finance ministry clarified.
“Concerns have been raised about the applicability of Collection of taxes at source (TCS) to small transactions under the Liberalized remittance scheme (LRS) from 1 July 2023. To avoid any procedural ambiguity, it has been decided that any payment by an individual using their international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and therefore, it will not attract any TCS,” the finance ministry clarified.
The current TCS treatment beneficial to education and health care payments will also continue, the statement said.
Necessary amendments to the Regulations (Management of Exchanges (Regulations on Current Account Transactions), 2000) will be issued separately.
The ministry’s decision earlier this week to bring international credit card spending under the RBI’s LRS and the resulting 20% TCS levy has drawn strong reactions from experts and stakeholders.
(With contributions from agencies)
