Clarification on applicability of TCS on transactions through Debit/Credit Cards under LRS
In Budget 2023, the rate of TCS was increased in case of certain transactions covered under Liberalised Remittance Scheme (LRS). Such new rate of TCS is going to be applicable from July 1 2023. Following table summarizes the change in such rates of TCS:
|
|
Up to 30.06.2023 |
With effect from 01.07.2023 |
||
| Nature of Remittance |
Threshold |
Rate |
Threshold |
Rate |
|
Remittance for Tour Package |
Nil |
5% |
Nil |
20% |
|
Amount remitted out of loan from any Financial Institution for education purpose |
7 Lakh |
0.5% |
7 Lakh |
0.5% |
|
Remittance towards education purpose in other cases |
7 Lakh |
5% |
7 Lakh |
5% |
|
Remittance for Medical Treatment |
7 Lakh |
5% |
7 Lakh |
5% |
|
Remittance for Any other purpose |
7 Lakh |
5% |
Nil |
20% |
Further, for a better clarity and to avoid any procedural ambiguity, the Finance Ministry issued a press release on May 19 2023 stating that TCS will not applicable on transactions made by an individual through their International Debit or Credit Cards up to Rs 7 lakh per financial year and such payments will be excluded from Liberalized Remittance Scheme (LRS) limits.
Read full press release from below link:
https://pib.gov.in/PressReleasePage.aspx?PRID=1925592
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