No TCS on overseas payment via credit card up to Rs 7 lakh
New Delhi, May 19
The government on Friday said no TCS will be levied on international spending of up to Rs 7 lakh a year by using debit or credit cards.
Facing backlash from a wide section of people, the Finance Ministry said the move is aimed at removing procedural ambiguity with regard to Liberalised Remittance Scheme (LRS) and the levying of Tax Collected at Source (TCS).
The ministry’s decision earlier this week to bring international credit card spending under the RBI’s liberalised remittance scheme (LRS) and the consequent levy of 20% TCS has evoked sharp reactions from experts and stakeholders.
“To avoid any procedural ambiguity, it has been decided that any payments by an individual using their international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS,” the ministry said in a statement.
Currently, payments of up to Rs 7 lakh for medical treatment abroad and towards education do not attract TCS. TCS on such expenditures is at the rate of 5%.
Existing beneficial TCS treatment for education and health payments will also continue, the ministry added. — PTI
Finance Ministry’s clarification
- The decision to bring international credit card spending under the RBI’s liberalised remittance scheme and the consequent levy of 20% tax collected at source (TCS ) had evoked sharp reactions from experts and stakeholders
- Currently, payments of up to Rs 7 lakh for medical treatment abroad and towards education do not attract TCS. Such expenditures attract TCS at the rate of 5%
- Existing beneficial TCS treatment for education and health payments will also continue, the Finance Ministry said
