Tax to be paid on credit card payments during foreign tour
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New Delhi : There is a very important news for the residents of India going on foreign tour. Tax has to be paid on credit card payments during foreign tours. Credit card payments for foreign visits will be brought under the ambit of the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India (RBI). Its purpose is to ensure that such expenses come under the purview of Tax Collection at Source (TCS).
TCS can get relief
Finance Minister Nirmala Sitharaman on Friday introduced the Finance Bill 2023 for the consideration and passing of the House, saying that the RBI has been asked to find ways to bring credit card payments on foreign tours under the LRS. He said that it has been found that credit card payments on foreign tours do not come under LRS and such payments escape TCS. The Finance Minister said that RBI has been urged to find ways to bring credit card payments on foreign tours under tax collection at source by bringing them under LRS.
No TCS on Education-Medical
In the budget for the financial year 2023-24, under the Liberalized Remittance Scheme, 20 percent TCS was proposed on sending money from India to any other country except education and medical from July 1, 2023. Before this proposal, 5 percent TCS was levied on sending more than seven lakh rupees outside India.
tax collection at source
Tax Collection at Source is an income tax collected by the seller of specified goods from the buyer. TCS is a system where the person selling specified goods is liable to collect tax from the buyer at a specified rate and deposit the same with the government. Under the LRS brought in the country in 2004, it was initially allowed to send $ 25,000. The LRS limit has been revised in phases to suit the economic conditions.
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