E-Paper
Overseas spending using credit cards not to attract TCS
New TCS rule on foreign remittance will come into effect from October 1
There will be no change in the rate of tax collected at source (TCS) for all purposes under the Liberalised Remittance Scheme (LRS) and for overseas travel tour packages, regardless of the mode of payment, for amounts up to ₹7 lakh per individual per annum, the Union finance ministry announced on Wednesday. The overseas spending using international credit cards will not be included under the LRS and hence, would not attract TCS.
The government has also decided to postpone the implementation of the revised TCS rates.
On May 16, the government brought overseas credit card spending under LRS, which meant any spending using credit cards overseas would attract a 20 per cent tax from July 1. Debit card spending was already part of LRS. The move to levy tax TCS attracted criticism with some calling it "tax terrorism".
The government later issued a release stating no TCS will be deducted on the spending of up to ₹7 lakh overseas using any debit or credit card.
“In response to the comments and suggestions, it has been decided to make suitable changes. Firstly, it has been decided that there will be no change in the rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of the mode of payment, for amounts up to ₹7 lakh per individual per annum.”
"It has also been decided to give more time for the implementation of the revised TCS rates and for inclusion of credit card payments in LRS," the finance ministry said.
