Finance Ministry

No TCS on payments by international Debit or Credit cards upto Rs 7 lakh per financial year

No TCS on payments using international Debit or Credit cards upto Rs 7 lakh per financial year under Liberalised Remittance Scheme (LRS)

The Ministry of Finance has issued a clarification on applicability of Tax Collection at Source to small Debit/Credit Transactions under LRS.

As per the Press release dated 19th May 2023, concerns have been raised about the applicability of Tax Collection at Source (TCS) to small transactions under the Liberalized Remittance Scheme (LRS) from July 1, 2023.

To avoid any procedural ambiguity, it has been decided that any payments by an individual using their international Debit or Credit cards upto Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS.

Existing beneficial TCS treatment for education and health payments will also continue.

The necessary changes to the Rules (Foreign Exchange Management (Current Account Transactions Rules), 2000) will be issued separately.

Read Press Release Click Here >>

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