What after 1oct
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20% TCS on all international transactions done using a credit card
- Thread starter TechnoFino
- Start date
Any chance of this 20% TCS getting cancelled or further delayed beyond Oct 1st? Why isn't there a credit card/bank lobby for this sort of thing?
As per the latest communication from bank. CC transactions won't be counted as LRS after 01 Oct. So as of now TCS on cc transaction is in cold storage.
Aisha Mushtaq
TF Buzz
helpful.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
Update on 19th May, 2023:
The Ministry of Finance has recently issued a clarification regarding the implementation of TCS (Tax Collected at Source) on credit card and debit card transactions from July 1, 2023.
According to the latest notification, any individual making payments using their international debit or credit cards up to Rs. 7 lakh per financial year will be excluded from the LRS (Liberalized Remittance Scheme) limits. This means that these transactions will not attract any TCS. Additionally, the existing TCS exemption for education and health payments will continue to apply.
So, you can enjoy TCS-free international transactions up to
Once you exceed the TCS-free limit, a 5% TCS will be applicable for medical and educational transactions, while a 20% TCS will be levied for all other transactions.
- Rs. 7 lakhs for medical purposes
- Rs. 7 lakhs for educational purposes
- and another Rs. 7 lakhs for other purposes
Note/Update: TCS not applicable on credit card international transactions, It's on hold.
Hi! I have a query I have already spent 11L on international spends via credit card. Can I transfer more money to not via credit card but otherwise abroad?
Also since all the spends via credit card were before 1st of October, I am assuming there won't be any TCS levied, right?
Govt has postponed TCS on cc. So, no TCS for you.
CARDBITRAGE
TF Ace
So how does TCS on international spends through CC work now?
No TCS on cc spends until further notice.
Greetings Members,
Been reading a few articles that Apr '24 onwards, CC spends outside India shall fall under the 7 Lakh INR threshold.
Any senior members could share some insight and have a discussion going / start a new section ?
This shall affect a lot of the members who travel overseas frequently, spend via CC and also exchange currency (INR - XXX) since everything is reflected in the AIS these days.
Been reading a few articles that Apr '24 onwards, CC spends outside India shall fall under the 7 Lakh INR threshold.
Any senior members could share some insight and have a discussion going / start a new section ?
This shall affect a lot of the members who travel overseas frequently, spend via CC and also exchange currency (INR - XXX) since everything is reflected in the AIS these days.
Debit cards have had this TCS applied since quite a while ago. Some banks apply it after 7L others from any amount and just give you a TCS certificate.
The new thing was applying TCS to credit cards which have been exempt.
You can only it claim it back as tax credit during IT filing.
Aditya12
TF Premier
DCB refunds in about 7-12 days.
I got same day refund in dubai atm withdrawal
Aditya12
TF Premier
Ah okay. I never get refund that soon. Always in around a week. Last month got refund in 12-13 days.
paxauquabriba-4876
TF Premier
modiji wants u to dal roti khao & no more eating pizza from overseas
pratik7
TF Buzz
Date bhi likh dete ye. April me mera to kata hai inhone
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