Relief to those using credit cards, now TCS will not be applicable on spending abroad
Credit Card New Rules: The decision of TCS on credit cards from July 1 has been postponed by the government. This will provide relief to those credit card users who go abroad and make credit card payments. The government has issued a notification saying that credit card transactions are excluded from LRS.
A notification was issued by the Ministry of Finance saying that the Foreign Exchange Management Rules under the Leveraged Remittance Scheme (LRS) will not include credit card expenses abroad.
In the notice issued by the Ministry, it was said that these changes in the Foreign Exchange Management Rules (2000) will be effective retrospectively from May 16.
Including rule seven in the Foreign Exchange Management Rules, the notification said that if a person goes abroad and does a credit card transaction, it will not be included in the LRS.
Let us tell you, from July 1, credit card payments were to be brought abroad under LRS. If this was the case, a TCS of 20 percent would have to be paid for spending money abroad on credit cards, which would have put an additional financial burden on the people, but now it has been withdrawn.
An Indian citizen can remit up to USD 2.50 lakh abroad under the RBI's Liberalized Remittance Scheme.
In the notification issued by the Ministry on June 28, it was said that we want to give more time to banks and card companies to upgrade the IT network. For this reason, the government has decided to postpone the notification issued on May 16.
Post withdrawal of the decision, credit card transactions abroad will not come under LRS and hence TCS will not be applicable. This will provide relief to those who spend money on credit cards abroad and will not have to pay additional TCS.
