No 20% TCS on RS 7 lakh: On International Credit Card and Debit Card transactions under LRS, exemption limit will Rs 7 lakh
Responding to concerns of taxpayers over the imposition of 20% TCS on International Credit Card and Debit Card transactions under the Liberalised Remittance Scheme (LRS) from July 1, the Central Government today said no TCS will be collected on small transactions up to Rs 7 lakh.
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“Concerns have been raised about the applicability of Tax Collection at Source (TCS) to small transactions under the Liberalized Remittance Scheme (LRS) from July 1, 2023. To avoid any procedural ambiguity, it has been decided that 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 not attract any TCS,” the Government said in a statement.
“Existing beneficial TCS treatment for education and health payments will also continue,” it added.
Meanwhile, the government also said that necessary changes to the Rules – Foreign Exchange Management (Current Account Transactions Rules), 2000 – will be issued separately.
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Commenting on the Government’s decision, Naveen Wadhwa, DGM, Taxmann, said, “The relaxation from TCS has been given only for overseas spending using International Debit or Credit cards if the threshold limit of Rs 7 lakhs per financial year is not breached. This relaxation shall not be available for any remittances made from India. Thus, any remittance for investment, ticket booking, purchase of goods, payment of subscription fees, etc., shall continue to be subject to TCS at 20%.”
