• Hey there! Welcome to TFC! View fewer ads on the website just by signing up on TF Community.

20% TCS on all international transactions done using a credit card

True, I use DCB Bank's Niyo Global Card. Even there they charge TCS upfront and refund after 14 days.

We wouldn't even know if the 7L is breached or not. If we don't get the refund then it's probably breached.
Well could be worse like DBS, they just keep charging TCS at the respective rate and give you a TCS certificate at the end of the financial year so you can claim a refund.

In this case nothing changes, you still have to pay TCS upfront which sucks big time.

While I get the "good" nature of the new rules it is rather a mindless fix that just screws everyone up rather than addressing the small minority that cause the problem. It is a lazy implementation from the top that just causes headaches to everyone else, from banks to citizens to businesses, left and right for what is a very very small minority.

I do not understand the need to "reinvent the wheel", they come with a square wheel like this and they'll be happy to roll with it. There's plenty of good or different approaches to this issue, but sometimes it feels like they have to come up with 'original' and often dumb and unnecessary ideas, laws, implementation.

Also unless they're able to check against PAN people will just have cards with all banks now and split their expenses so it won't cross 7L per PAN per bank, which seemed to be current state for most banks if they even managed any sort of system unlike DBS which for compliance and to be risk-free, has this approach.
 
Does IndusInd charge TCS upfront on their debit cards? I have some travels planned in the coming months, and I am primarily going to carry cash and zero forex DC/CC. If anyone has done any forex transactions with an IndusInd DC recently, kindly let me know so I can be better prepared.
 
Its horrendous to the Middle Class Taxpayer.

First pay 20-30% of your income as Income tax. Save up for years managing House Loans, EMI's and plan a trip abroad. Spend 10L, give 2L to the Govt for what? Why should I give the Govt 20% loan of my hard earned money for 9 months? its absurd and no other country does this AFAIK. Get double taxed on Petrol, Car, Hotels in India, now they want to tax me abroad as well? No way this is justified
 
Its horrendous to the Middle Class Taxpayer.

First pay 20-30% of your income as Income tax. Save up for years managing House Loans, EMI's and plan a trip abroad. Spend 10L, give 2L to the Govt for what? Why should I give the Govt 20% loan of my hard earned money for 9 months? its absurd and no other country does this AFAIK. Get double taxed on Petrol, Car, Hotels in India, now they want to tax me abroad as well? No way this is justified
It's almost inherent that the kind of people who use credit cards file ITR as it is often required or common method to prove credit card eligibility.

We as forum users know credit card payments show up in TRACES and that IT notices happen depending on your usage, although most of these seemed to happen 3-5 years after the financial year in question which is a different issue altogether.

Also the FM minister highlighted mainly the issue of discrepancies between ITR and Credit Card spends, with what sounded was a very small minority which didn't actually file ITR. Also it's not like you can pay cash for your credit card spends so there's always *traces* when using credit cards. Probably where the name of that came from.

We pay loads of taxes from income to GST to electricity duty to excise duty and even custom duties on basically every single item that isn't made in India like your phone, laptop, clothes, etc has already attracted duties on import and that is reflected in the pricing.

India isn't a cheap country at all... if anything it is among the most expensive ones if you consume any imports some which are very common such as your clothes, watches, phones, nearly every electronic gadget, etc. Nearly any import is a lot more expensive than almost any other country. Look at your phone or laptops pricing overseas versus the cost in India, it can often be found at half the price or at very steep discounts in neighbouring countries.
And why is it more expensive? All due to taxes.

Even most of the petrol prices we pay is mostly taxes. Not sure how true this article is but it says nearly 70% of the petrol prices we pay are taxes.

You get taxed at possibly every single point there is.

Then 20% TCS is a VERY steep amount and disproportionate when most other methods are charged 5% TCS.

Now pair that with the new tax regime which does take away with tax exemptions/benefits, and some of the new taxation charges and changes in areas like healthcare.

Now I feel like I'm wearing a tinfoil hat, but it looks like a tax snowball to me. It is BURDENSOME and UNFAIR for the middle class, and on these taxes we pay there's lack of substantial benefits (or next to none) and a lack of adequate public services, many are pathetic.

With all of that and the current state of corruption the last I'd want to do is pay more taxes. I see 0 tangible benefits on it for me and I'm certain that money is being pocketed in many different ways by people who shouldn't be having none of it with all the favouritism around and corruption.

One good example which exposed this was Adani-Hindenburg matter, which seems to have been forgotten and swept under the rug.
 
Last edited:
Hello everyone,

I am still confused w.r.t. the following. Would appreciate inputs. Thanks!

1. Do foreign currency transactions on CC between April 1 - May 15 get covered under the 7 lac LRS limit that is in place until 30 June? or since the first government notification came on May 16, do only foreign currency CC transactions from May 16 - June 30 get covered under the 7 lac LRS limit?
2. In the 2nd government notification shared on 19 May where they clarified the May 16 notification, they introduced a 7 lac limit on intl CC use which would not fall under the LRS quota and hence the TCS collection.
a. Is this 7 lac limit separate for just intl CC use or does it include other modes too e.g. investment in US stocks?
b. Is the start date for this considered to be 1 April 2023 or May 16 2023 or May 19 2023 or July 1 2023?
c. Is this 7 lac limit per CC or per bank (multiple cards in 1 bank) or per PAN?
 
"The necessary changes to the Rules (Foreign Exchange Management (Current Account Transactions Rules), 2000) will be issued separately."


So wait for some time for 2nd question.

For 1: it counts from may 16.
Not necessarily. TCS will apply from transactions after May 16, but the 7 lac limit will apply from April 1st as the May 19 circular says if you cross 7 lacs in the particular financial year.

The government should come up with more clarifications on this
 
Big update for taxpayers! Govt may link TCS with TDS | How will it impact cash flows of individuals? CEA V Anantha Nageswaran explains


 
Big update for taxpayers! Govt may link TCS with TDS | How will it impact cash flows of individuals? CEA V Anantha Nageswaran explains


If government is successful in linking this most of the issues with the TCS goes away
 
Hey folks,

My wife is traveling to Europe and I want to book Airbnb/hotel for her stay through Magnus will this also fall under the TCS (tax collected at source) category? I will be making a booking today or tomorrow.
 
Hey folks,

My wife is traveling to Europe and I want to book Airbnb/hotel for her stay through Magnus will this also fall under the TCS (tax collected at source) category? I will be making a booking today or tomorrow.
Yes, all forex transactions except medical & education. If below 7L in a FY no TCS.
 
ICICI sent me this email today...
1685806868754.png

1685806926064.png

It seems from Jul1 onwards even Rs100 spent on anything (other than medical and education) will attract TCS of Rs20.
Massive inconvenieance and compliance burden for an average tax payer....
 
Yes, all forex transactions except medical & education. If below 7L in a FY no TCS.
It seems there no threshold like below 7L. Every rupee spent in Foreign exchange other than Medical & Education attracts 20% TCS, according to the email from ICICI in the above post.
 
Last edited:
This seems to be in respect to bank transfers. CC are explicitly exempt until 7 lakh.
And I think ICICI hasn't updated yet. This mail is pretty similar to the one I received after budget but before the CC fiasco. I haven't received any new mail tho.
 
This seems to be in respect to bank transfers. CC are explicitly exempt until 7 lakh.
And I think ICICI hasn't updated yet. This mail is pretty similar to the one I received after budget but before the CC fiasco. I haven't received any new mail tho.
CC are explicitly exempt until 7 lakh.
Is there any notification / official communicatoin about this?? If this is the case, I will be happy...
 
Is this limited to bank transfers or is it also for forex card, DC and CC spends?
In my view this applies to whatever covers under LRS, which includes all the things you mentioned above.
 
Back
Top