TCS on Credit Cards: Now it is going to be easy to spend with credit card or debit card during foreign trips. Now people will not have to worry about deducting tax on such expenditure.
Liberalized Remittance Scheme: People often make various types of payments through credit card or debit card. If you are also preparing to travel abroad in the coming days or are going to make international payment, then there is good news for you. The government has decided not to charge TCS on such payments up to Rs 7 lakh.
The finance minister had told this
Earlier, there were reports that TCS i.e. Tax Collected at Source will be levied on every payment made by credit card during foreign travel (TCS on Credit Card Payment). Finance Minister Nirmala Sitharaman gave information about this while presenting the Finance Bill 2023 in the Lok Sabha. He had said that it is being considered to bring credit card payments under the purview of the Liberalized Remittance Scheme (LRS) during foreign visits. For this, the Reserve Bank has been asked to look into ways to bring such payments under the ambit of LRS.
This necessitated the need for change.
Credit card payments made during foreign trips are currently not covered under LRS. In this way, such payments escape tax collection at source. For this reason, the Reserve Bank was asked to consider ways to bring all such payments under the ambit of LRS and TCS. Earlier, while presenting the general budget in February, the Finance Minister had proposed to collect TCS at the rate of 20 per cent on money sent out for work other than education and medical needs, which were to be implemented from 01 July.
These proposals were made in the budget
In the budget, under LRS, TCS was proposed to be increased from 5 per cent to 20 per cent on sending money outside the country. It was also proposed to remove the limit of Rs 7 lakh in the budget. However, now the government has said that TCS will not be charged on international payments up to Rs 7 lakh made through credit or debit cards during a financial year. Apart from this, the exemption on the expenses related to health and education will remain intact. Such expenses will be kept out of the purview of TCS, which means that no tax will have to be paid on them.
