Quick Summary
Credit card payments for foreign travel will be brought under Reserve Banks Liberalised Remittance Scheme (LRS) to ensure that such expenses do not escape TCS (Tax Collection at Source). While moving the Finance Bill 2023 for consideration and passage in the Lok Sabha on Friday,Finance Minister N
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FAQ :
These payments are being brought under LRS to ensure that Tax Collection at Source (TCS) is applied, as it was previously noted that such payments were not being captured and were escaping TCS.
Finance Minister Nirmala Sitharaman announced that the Reserve Bank has been asked to look into ways to bring credit card payments on foreign tours under the LRS.
LRS, introduced in 2004, permits Indian residents to remit up to USD 250,000 per financial year for current or capital account transactions or a combination of both.
TCS is a concept where the seller of specified goods or services collects tax from the buyer at a prescribed rate and deposits it with the government.
The Union Budget 2023 proposed a 20 percent TCS for foreign outward remittances under LRS (excluding education and medical purposes), applicable from July 1, 2023.
Corporates, partnership firms, HUFs, and charitable trusts are not eligible to use the LRS.
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