20% TCS on international credit card: Govt issues five-point clarification
1 year, 7 months ago

20% TCS on international credit card: Govt issues five-point clarification

Live Mint  

The Finance Ministry on Thursday issued a set of FAQs) on the Tax Collection at Source on foreign remittance through the Liberalised Remittance Scheme. The Union Budget 2023-24 had hiked TCS rates to 20%, from 5% currently, on overseas tour packages and funds remitted under LRS. Ans Section 206C of the Income-Tax Act 1961 provides for TCS is the business of moding in alcohol, liquor, forest produce, scrap etc, Sub-section of the aforesaid section provides for TCS on foreign romittance through the Liberalised Remittance Scheme and on the sale of overseas tour packages. For TCS on remittance for travel and incidental expenses related to education and medical treatment, the rates of TCS as applicable to remittances for education and medical treatment, respectively, shall apply. Meanwhile, Spending in foreign exchange through international credit cards will be covered under the RBI's liberalised remittance scheme, under which a resident can remit money abroad up to a maximum of USD 2.50 lakh per annum without the authorisation of the Reserve Bank, as per a Finance Ministry notification.

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History of this topic

Union Budget 2024: Overseas credit card spending above ₹7 lakh may be taxed 20%
5 months, 1 week ago

Union Budget 2024: Overseas credit card spending above ₹7 lakh may be taxed 20%

Hindustan Times  

The Union Budget 2024, which is scheduled to be presented on July 23 may bring overseas credit card spending above ₹7 lakh under the Liberalised Remittance Scheme, which means that the government would be able to collect a 20% tax on it, Moneycontrol reported, citing an unnamed government official. Expenses paid internationally using debit cards, forex cards, or other payment …

Tax collection at source: Who issues a TCS certificate and when?
1 year, 1 month ago

Tax collection at source: Who issues a TCS certificate and when?

Live Mint  

Tax collection at source, or TCS, is an additional amount collected as tax by a seller of specified goods from the buyer at the time of sale over and above the sale amount and is remitted to the government account. Starting Oct 1, 2023, the Government of India introduced TCS rate of 20 percent on foreign remittances of more than …

What is tax collection at source on foreign remittances under LRS? An explainer
1 year, 4 months ago

What is tax collection at source on foreign remittances under LRS? An explainer

Live Mint  

In the Budget 2023, government rolled out a higher tax collection at source of 20 percent on outward remittances under the Liberalised Remittance Scheme The higher tax rate was supposed to come into effect from July 1 onwards, but on June 28, 2023, a finance ministry notification clarified that the higher rates will come into force when the threshold is …

Explained | The changes to the Liberalised Remittance Scheme
1 year, 5 months ago

Explained | The changes to the Liberalised Remittance Scheme

The Hindu  

The story so far: On June 28, the Finance Ministry in two announcements deferred the imposition of an increased 20% rate for Tax Collected at Source by three months to October 1, and said transactions made using international credit cards overseas would not fall under the purview of the Liberalised Remittance Scheme. To put things into perspective, while LRS designates …

How to get 5% TCS for remittances beyond ₹7 lakh
1 year, 5 months ago

How to get 5% TCS for remittances beyond ₹7 lakh

Live Mint  

The ministry of finance on 28 June deferred the applicability of increased TCS, or tax collected at source, rate of 20% on overseas tour packages and remittances under the Liberalised Remittance Scheme for a further period of three months, from 1 July to 1 October. Before the budget announcements, a uniform TCS rate of 5% was applicable on all kinds …

Payments using ICC on foreign visits to not attract TCS: Govt. notification
1 year, 5 months ago

Payments using ICC on foreign visits to not attract TCS: Govt. notification

The Hindu  

Payments made by using international credit cards during overseas visits will not attract Tax Collected at Source, as per a notification issued by the finance ministry on Friday night. Putting at rest the controversy over usage of ICC, the Ministry amended the Foreign Exchange Management Rules, 2000, on Friday to exclude ICC from the purview of the Reserve Bank's Liberalised …

International Credit Card Spends Excluded from Remittance Scheme: Finance Ministry
1 year, 5 months ago

International Credit Card Spends Excluded from Remittance Scheme: Finance Ministry

News 18  

The finance ministry on Friday amended the foreign exchange management rules to exclude international credit card spends from the purview of liberalised remittance scheme. “The use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India” will not be covered under LRS, the notification said while inserting Rule …

Overseas spending using credit cards not to attract Tax Collected at Source: Finance Ministry
1 year, 5 months ago

Overseas spending using credit cards not to attract Tax Collected at Source: Finance Ministry

The Hindu  

The government on Wednesday dropped plans to levy TCS on overseas payments made through international credit cards and said such expenses will be included in the Liberalised Remittance Scheme of the RBI. The Finance Ministry has also deferred by three months the implementation of a higher Tax Collected at Source rate of 20% on expenditures made under LRS and overseas …

Overseas spending using credit cards not to attract TCS; check details
1 year, 5 months ago

Overseas spending using credit cards not to attract TCS; check details

Live Mint  

The government announced on June 28 that overseas spending using international credit cards will not be included under the Liberalised Remittance Scheme and hence, would not attract TCS. In Finance Bill 2023, the government had increased the rate of TCS from 5 per cent to 20 per cent for remittance under LRS as well as for the purchase of overseas …

ITR filing: Sending money outside India? Know the new income tax rule
1 year, 6 months ago

ITR filing: Sending money outside India? Know the new income tax rule

Live Mint  

Every overseas remittance made under the liberalised remittance scheme would be subject to a 20% tax collected at source starting 1 July 2023, with the exception of those sent for medical and educational expenses, for which a 5% TCS will be imposed after the threshold of ₹7 lakh is exceeded annually. Starting 1 July 2023, Tax Collected at Source on …

Explained | Will all overseas spends come under the tax net?
1 year, 7 months ago

Explained | Will all overseas spends come under the tax net?

The Hindu  

The story so far: A proposal in the Union Budget to levy a higher tax on some types of remittances of funds abroad came into the limelight again this week after a notification was issued for its implementation from July 1. The Reserve Bank is being requested to look into this with a view to bring credit card payments for …

As 20% TCS on foreign remittances is set to kick in, we untangle its mystery here
1 year, 7 months ago

As 20% TCS on foreign remittances is set to kick in, we untangle its mystery here

Live Mint  

Travelling to an overseas destination or remitting money abroad is set to be attract a higher rate of tax with 20 percent TCS to kick in from July 1, 2023 onwards. It is, however, vital to note that those who are remitting money abroad for education and for medical treatment will continue to pay a lower rate for remittances in …

Spend up to ₹7 lakh abroad with your cards without worrying about TCS
1 year, 7 months ago

Spend up to ₹7 lakh abroad with your cards without worrying about TCS

Live Mint  

After backlash over 20% TCS on overseas credit card spending, the government on Friday announced that no tax will be charged on overseas spending of up to ₹7 lakh in a year using debit or credit cards. "To avoid any procedural ambiguity, it has been decided that any payments by an individual using their international Debit or Credit cards up …

Tax waived on annual forex spends up to ₹7 lakh: Finance Ministry
1 year, 7 months ago

Tax waived on annual forex spends up to ₹7 lakh: Finance Ministry

The Hindu  

The government, on May 19, blinked on its plan to levy a 20% tax on overseas credit card spending from July 1, in the face of a furore from taxpayers as well as businesses, and decided to exempt any payments by an individual using their international debit or credit cards up to ₹7 lakh per financial year from the levy. …

20% TCS on Credit Card Usage Outside India: What are the Changes & Why Have they Been Made?
1 year, 7 months ago

20% TCS on Credit Card Usage Outside India: What are the Changes & Why Have they Been Made?

News 18  

The Centre has changed the Foreign Exchange Management Act guidelines to include international credit card purchases made outside of India in the Liberalised Remittance Scheme. The finance ministry on Thursday said the changes in FEMA rules, which brings overseas international credit card spending under RBI’s liberalised remittance scheme, are intended to bring in parity in tax treatment of remittances using …

No Tax On Foreign Credit Card Spend Up To Rs 7 lakh
1 year, 7 months ago

No Tax On Foreign Credit Card Spend Up To Rs 7 lakh

Deccan Chronicle  

New Delhi: The government on Friday clarified that any individual making payments using their international debit or credit cards, up to Rs 7 lakhs per financial year, will be exempted from the Liberalized Remittance Scheme limits and will not be subject to Tax Collected at Source. To avoid any procedural ambiguity, it has been decided that any payments by an …

New rule for international credit card users: 20% TCS, LRS limits
1 year, 7 months ago

New rule for international credit card users: 20% TCS, LRS limits

Live Mint  

New rule for international credit card users: Spending in foreign exchange through international credit cards will be covered under the RBI's liberalised remittance scheme. Earlier, the usage of international credit cards for making payments for fulfilling expenses during travel outside India was not included in the LRS limit. Govt omits Rule 7 of the Foreign Exchange Management Rules, 2000 According …

Your credit card usage abroad will now be taxed
1 year, 7 months ago

Your credit card usage abroad will now be taxed

Live Mint  

New Delhi: The finance ministry has included use of credit card abroad by an Indian resident within the $250,000 limit that an individual is allowed to remit abroad in a year under the liberalised remittance scheme, showed an official order. Under this scheme, the Reserve Bank of India allows residents to spend funds abroad up to the specified ceiling for …

20% tax at source for offshore credit deals
1 year, 7 months ago

20% tax at source for offshore credit deals

Deccan Chronicle  

Mumbai: Come July 1, any payment made using a credit card to foreign vendors will be subjected to tax collected at source at 20 per cent irrespective of the amount paid. While moving the Finance Bill 2023 for consideration and passage in the Lok Sabha the Finance Minister Nirmala SItharaman had said that cross-border credit card payments are currently not …

Finance Bill 2023 was approved with amendments. Here are the highlights
1 year, 9 months ago

Finance Bill 2023 was approved with amendments. Here are the highlights

The Hindu  

The Finance Bill 2023 was been passed in Lok Sabha without a discussion and the House was adjourned to meet again on March 27. The Reserve Bank of India is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source thereon.” Withholding tax …

Foreign remittances: With 20% tax collection at source, sending money abroad to pinch more; details here
1 year, 10 months ago

Foreign remittances: With 20% tax collection at source, sending money abroad to pinch more; details here

Live Mint  

Travelling to an overseas destination or remitting currency abroad to your kin will now carry an extra financial burden of 20 percent towards the tax credit from the next financial year, announced the Union Finance Minister Nirmala Sitharaman during the Budget 2023. “The government seemingly wants to dissuade citizens from sending foreign currency abroad, and hence — levied a higher …

Budget 2023: 15% Hike in TCS For Foreign Travel & Investments, Says FM
1 year, 10 months ago

Budget 2023: 15% Hike in TCS For Foreign Travel & Investments, Says FM

News 18  

The government on Wednesday proposed to hike the TCS rate to 20 per cent from 5 per cent currently on overseas tour packages and a liberalized remittance scheme for remittance of funds out of India. Nangia Andersen India Partner Amit Agrawal said the increase in TCS rate to 20 per cent is a big surprise, especially with the comfortable forex …

Budget 2021: ’ Reduce tax on foreign remittance to boost overseas investments’
3 years, 11 months ago

Budget 2021: ’ Reduce tax on foreign remittance to boost overseas investments’

Live Mint  

The Finance Minister, in the last financial year had introduced a Tax Collected at Source of 5% on all outward remittances above ₹7 lakh. Indian residents can remit up to USD 250,000 under the LRS every year for various purposes such as medical treatment, gifts, maintenance of relatives abroad, foreign education and investment in real estate, stocks and bonds. However, …

Five changes taxpayers and investors need to make a note of
4 years, 2 months ago

Five changes taxpayers and investors need to make a note of

Live Mint  

From the deadline for filing belated or revised income tax return being pushed to the Reserve Bank of India’s new guidelines for credit and debit cards, quite a few recent developments will affect taxpayers, investors and consumers. RBI’s new card guidelines kick in: RBI’s new guidelines to secure payments through debit and credit cards came into effect on 1 October. …

Tax on LRS remittance is not an additional cost. Here’s all you want to know
4 years, 3 months ago

Tax on LRS remittance is not an additional cost. Here’s all you want to know

Live Mint  

By Viram Shah From October 1, authorised dealers, typically banks and remittance companies will collect 5% tax at source once LRS remittance made by an individual crosses 7 lakh in a financial year. The Union Budget 2020 proposed a 5% TCS on remittances undertaken via the Liberalised Remittance Scheme above ₹7 lakh. ₹15,000 will be deducted as TCS 2) For …

What is the TCS on foreign remittances?
4 years, 3 months ago

What is the TCS on foreign remittances?

Live Mint  

Indian residents can remit up to USD 250,000 under the LRS every year for various purposes such as medical treatment, gifts, maintenance of relatives abroad, foreign education and investment in real estate, stocks and bonds. Similarly payments for foreign education originating an education loan from a financial institution in India are subject to a lower 0.5% TCS. The TCS will …

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