Credit card payments for foreign travel will be brought under to Liberalised Remittance scheme making sure it does not overlap TCS.
While moving the Finance Bill of this year ahead in the Lok Sabha on Friday, the finance minister Nirmala Sitharaman said “The RBI has been asked to look into credit card payments made for foreign tours under the LRS”
Sitharaman Said “ It has been represented that payments for foreign tours through a credit card are not tracked under LRS and it overlaps TCS”
The RBI is being requested to look into this and make sure that payments made for foreign tours remain under LRS and Tax Collection.
The Union Budget 2023 actually proposed a TCS for foreign tour payments under LRS other than Education and medical purposes for around 20 percent which is applicable from July 1, 2023, Before this, the charges were applicable to the remittances made above 7 Lakh.
TCS is an income tax collected by the seller for the goods from the buyer. This is a concept where a person selling specific items is liable to collect tax from the buyer at a particular interest rate and deposit to the government. The LRS introduced in 2004 in India. The LRS limited is revised with the rising macro and microeconomic situations.