News Brief
International Credit Card Payments To Soon Attract 20 Per Cent TCS; Finance Ministry Issues Notification
Credit card usage (Representative Image) (PARK JI-HWAN/AFP/GettyImages)
The Centre in consultation with the Reserve Bank of India has amended a rule that will attract 20 per cent tax collection at source (TCS) on credit card usage outside India.
The Union Finance Ministry made the announcement via a late-night notification on Tuesday (16 May).
The Finance Ministry in its notification said that rule 7 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 will be omitted, bringing the usage of international credit card towards meeting expenses on a visit outside India under the Liberalised Remittance Scheme (LRS).
The amended Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 will include international credit card payments under the LRS from 1 July.
The Liberalised Remittance Scheme (LRS) did not cover credit card use in foreign travel earlier.
Previously, only debit card, forex card, and bank transfers were included in the LRS, reports India Today.
The notification brings transactions through credit cards outside India under the ambit of the LRS with immediate effect, which enables the higher levy of TCS, as announced in the Budget for 2022-23, from 1 July.
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