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20% TCS on all international transactions done using a credit card
- Thread starter TechnoFino
- Start date
Why?
Saw on reddit
The official explanation is that there are a lot of people in India who don't file income tax and they want people to file it in the first place. They have been noticing that there are several accounts which stays dormant and simply send money abroad.
My personal interpretation is that they don't want indian money to go abroad thereby increasing the value of rupee currency. Plus a lot of brain drain.
Keep in mind, TCS is not an extra tax. You can claim the deduction while filing the income tax. Pretty much an interest free loan to the government and they sometimes take a long time to give out the refund.
My View - Free working capital for govt, plus many people may forget etc to claim back in Itr. Scamsters dont get caught even after getting exposedfor lakhs of crores of fraud, no tax on agricultural income, no tax on MP salaries.
I agree to these points but why make everyone go through the pain of applying for refund. There should a some kind of threshold above which the TCS should be deducted. Now, everyone has to keep track of transactions and ensure that TCS is reflecting in your AIS. This is a cumbersome tasks both for tax payers and the govt. Why the govt. keeps increasing compliance for people who are already paying tax?
alanabraham
TF Premier
My question is why I should keep my money with government for almost an year. That too even when I drink a cup of coffee in foreign country. Such a ridiculous implementation. I wonder whose brain is behind this!Effective from May 16, 2023, all international transactions made using credit cards will now fall under the Liberalized Remittance Scheme (LRS). Furthermore, a 5% Tax Collected at Source (TCS) will be applicable on all international transactions until July 1, 2023.
#FEMA 2000 rule no 5 & 7:
# official Gazette of GOI, department of economic affairs: notified rule 7 (of FEMA 2000) has been omitted
Currently, a 5% Tax Collected at Source (TCS) will be applicable on transactions exceeding the threshold of Rs. 7 Lakhs in a financial year. This means that if your total spending is below Rs. 7 Lakhs till 1st July, 2023, no TCS will be charged. However, if your spending reaches Rs. 8 Lakhs, the 5% TCS will be applicable only on the amount exceeding Rs. 7 Lakhs, which is Rs. 1 Lakh in this case.
Starting from July 1, 2023, a 20% Tax Collected at Source (TCS) will be applicable on all international transactions conducted using Indian credit cards. Whether you are purchasing a holiday package or indulging in shopping, you will be required to pay a 20% TCS. However, you will have the option to adjust this amount while filing your Income Tax Return (ITR).
Effective immediately, all credit card transactions will be subject to the applicable Liberalized Remittance Scheme (LRS) rules. This means that any total transactions exceeding USD 2.5 lakh or its equivalent in foreign currency will require prior approval from the Reserve Bank of India (RBI).
Furthermore, a 5% Tax Collected at Source (TCS) will be applicable on transactions falling under the medical and education categories, but only for amounts exceeding 7 lakhs. For instance, if you make a payment of Rs. 9 lakhs towards educational institution fees, the 5% TCS will be charged on Rs. 2 lakhs (the amount exceeding 7 lakhs).
Reference/Source: FEMA (Current Account Transactions) Rules, 2000
Chaitanya-a
TF Prestige
Just some bureaucrats trying to please their boss by coming up with some new idea (not necessarily beneficial for society).
N-Sitharaman is the worst finance minister I've seen. She ruined all the good deeds done by sir Arun Jaitley under BJP.
in few years capital gains tax may also increase to 30%
Modi government eyes higher capital gains tax for rich to curb inequality
Indias reliance on indirect taxes — levies on consumption — rather than direct taxes on capital is often cited by economists as the main culprit behind the countrys poor getting left behind even as the nation minted 70 new millionaires each day between 2018 and 2022. Oxfam International...
Maybe after 2024
roshancc
TF Premier
My Problem is why punish law abiding citizens to weed out the culprits why not pinpoint and nab the culprit in the first place you have enough data already !
My interpretation of the legal system was "Your are Innocent unless proven guilty" but the definition has changed "You are absolutely guilty unless you prove your Innocence".
Now I have to pay 20% extra on Games or Windows Key I buy on SCDkeys and Epic store my only concern.
Alex292929
TF Premier
can I buy ms office key from this website & is it legit?Now I have to pay 20% extra on Games or Windows Key I buy on SCDkeys and Epic store my only concern.
Why subject businesses for it. Lots of software and all are subscribed and now monthly subscription would cost 20% extra. Could have easily resolved this by having this implemented above a certain threshold. They are burning the forest down to catch some foxes!
Yeah that's correct, people like us (who are regular tax payers) will not affect them much though it adds to little bit of inconvenience. But I think, few tax filing startups can came up with solutions like scanning the cc bills for forex transactions (cred already scan the bill pdfs).
Indians can be at peaks they will open multiple bank/cc accounts and use them to reach the threshold individually 🤣
My friend already does this he receives business payments in name of all family members 😂
I also buy xbox games from eneba/cd keys. Dayummm, i think i need to open an international bank account 😂My Problem is why punish law abiding citizens to weed out the culprits why not pinpoint and nab the culprit in the first place you have enough data already !
My interpretation of the legal system was "Your are Innocent unless proven guilty" but the definition has changed "You are absolutely guilty unless you prove your Innocence".
Now I have to pay 20% extra on Games or Windows Key I buy on SCDkeys and Epic store my only concern.
it should be bank's/card issuer's duty to collect TCS and send TCS certificates to customers, just like TDS
This is just one anecdotal case. There would be very small percentage of people doing it. Then there is always a hawala way to get forex. Loopholes will always be there in any law but it doesn't mean you discomfort the majority to catch a few of these people.
Some black money people travel abroad but make bookings via some other people (card/bank etc) who they pay in cash. This is the target they want to stop. They know people will have to declare taxes if they wanna go abroad now. Easy way out for IT dept, but not thinking of the 99.7% honest junta
This is a good question till now I don't see any TCS on hotels/flights on mmt and the price is same as before ? Maybe a loophole which can be exploited for now.
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