As per the announcement from the Ministry of Finance, now there will be no change in the rate of Tax Collected at Source (TCS) on all international expenses done via credit cards.
By Crox Times Desk: Since its announcement, the centre on June 28, defer the decision to include International Credit Card spending under the LRS. According to an announcement by the Finance Ministry, there will be no change in the rate of Tax Collected at Source on International Spending through credit cards.
This certainly means the holders of International Credit Cards will not have to pay additional charges while making transactions during their foreign trips.
In the Budget 2023, the finance minister Nirmala Sitharaman announced the outward expenses under LRS would be 20 percent TCS starting from July 1. This means that International Credit Card expenses would attract also attract 20 percent of TCS.
After this announcement, experts argued that would add burden on the banks as 20 percent would be too high. If the move was targeted towards making transactions, a lower 1-2 percent would be enough.
The Change you need to know
As per the official June notification, TCS would be applied on foreign transactions exceeding INR 7 lakh. This would be in effect from October 1 instead of July 1. This includes INR 7 Lakh combines all the spending including medical purposes and education.