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 higher than Rs 7 lakh. Education and medical expenses When outward remittances are sent for the purpose of education, the finance ministry in its June 28 notification clarified, there will be no tax collection at source for an amount up to Rs 7 lakh. For all other expenses, the rate of TCS on foreign remittances beyond Rs 7 lakh will attract a higher rate of 20 percent. However, for overseas tour packages, the rate of TCS will be 5 percent for an amount lower than Rs 7 lakh and 20 percent for a higher amount.

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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 …

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 …

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 …

Saket Gokhale spreads fake news about 20% TCS on credit cards
1 year, 7 months ago

Saket Gokhale spreads fake news about 20% TCS on credit cards

Op India  

On Saturday, Trinamool Congress spokesperson Saket Gokhale courted controversy after he spread disinformation about the 20% TCS, introduced by the Indian government, over the use of credit cards for international purchases. “Any payments by an individual using their international Debit or Credit cards upto Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will …

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 …

Govt clarifies payments abroad for up to ₹7 lakh will not be taxed
1 year, 7 months ago

Govt clarifies payments abroad for up to ₹7 lakh will not be taxed

Hindustan Times  

The government issued a clarification on Friday stating that a 20% Tax Collection at Source will be applicable only to overseas credit card transactions exceeding ₹7 Lakh. Previously, on Thursday, the government announced the inclusion of credit card transactions in foreign currency under the LRS and the implementation of a 20% TCS starting July 1, 2023. These are credit card …

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 …

Experts criticise decision to tax credit card usage in foreign countries
1 year, 7 months ago

Experts criticise decision to tax credit card usage in foreign countries

Hindustan Times  

Taxpayers and experts sharply criticised the government’s decision from earlier this week to bring credit card transactions in a foreign currency under what is known as the liberalised remittance scheme, which will now involve a 20% levy as tax collected at source for most such payments, as a move that will hit people’s foreign travel budgets, constrain cash flows, and …

Tax on foreign card spends: A bolt from the blue
1 year, 7 months ago

Tax on foreign card spends: A bolt from the blue

Live Mint  

What is this tax on foreign spending? Spending on a corporate credit card for business purposes is technically spending on the ‘current account’ and should not fall under LRS. The finance ministry also supported this position in a tweet on 18 May by giving the example of an employee on a business trip —which would not come under LRS. However, …

'No tax on political donations': Ashneer Grover slams 20% TCS on international credit cards
1 year, 7 months ago

'No tax on political donations': Ashneer Grover slams 20% TCS on international credit cards

Hindustan Times  

After the Centre announced that an increased Tax Collected at Source rate of 20 per cent will be imposed on international credit card spending, former BharatPe MD Ashneer Grover slammed the new notification. Taking a jibe at the Indian government’s ‘interesting’ rule, Grover on Thursday said that instead of tax deduction, political donations enjoyed tax exemption. In a tweet, Ashneer …

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 …

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 …

International credit card usage to come under RBI's LRS; 20% TCS to be charged July 1
1 year, 7 months ago

International credit card usage to come under RBI's LRS; 20% TCS to be charged July 1

The Hindu  

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 $2.50 lakh per annum without the authorisation of the Reserve Bank, as per a Finance Ministry notification. The Ministry on May 16 notified the Foreign Exchange Management Rules, 2023, to …

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 …

RBI asked to monitor card spend under LRS
1 year, 8 months ago

RBI asked to monitor card spend under LRS

The Hindu  

Seeking to tighten the implementation of the increased 20% tax collection at source norm for foreign remittances introduced in Budget 2023-24, Finance Minister Nirmala Sitharaman on Friday said the RBI has been asked to monitor the use of credit cards for foreign travel purposes. “It has been represented that payments for foreign tours through credit cards are not being captured …

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 …

5% tax on foreign tour, investments and study abroad from today: Details here
4 years, 2 months ago

5% tax on foreign tour, investments and study abroad from today: Details here

Live Mint  

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. For the current financial year, any remittances made post March 2020 will count towards the 7 lakh threshold. Viram Shah explains, "If you have transferred ₹6 lakh before October and you transfer additional …

Key tax changes to kick in today
4 years, 2 months ago

Key tax changes to kick in today

Live Mint  

Several key direct and indirect tax changes will kick in from 1 October that businesses and individual taxpayers need to take note of. Bankers would be liable to collect TCS and remit to the government; therefore, the incidence of TCS is on the remitter, said Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, a tax advisory firm. Banks may start collecting …

Key tax changes kicking in from tomorrow
4 years, 2 months ago

Key tax changes kicking in from tomorrow

Live Mint  

Several key direct and indirect tax changes will kick in from 1 October, which businesses and individual taxpayers need to take note of. Bankers would be liable to collect TCS and remit to the government, therefore, incidence of TCS is on the remitter, explained Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, a tax advisory firm. Banks may start collecting tax …

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 …

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