NEW DELHI: The finance ministry on Wednesday mentioned that abroad spending utilizing worldwide bank cards is not going to be included beneath the Liberalised Remittance Scheme (LRS) and will not due to this fact be topic to Tax Collection at Source (TCS).
It additionally deferred the implementation of a better charge of TCS of 20 per cent on abroad remittances beneath LRS, like tour bills, by three months.
The revised TCS will now come into impact from October 1, 2023, it mentioned.
However, credit card spending overseas is not going to entice TCS from October 1.
The greater TCS charge will probably be relevant solely when the LRS funds exceed the brink of Rs 7 lakh, an announcement by the ministry mentioned.
In Union Budget 2023, the federal government had elevated the speed of TCS from 5 per cent to twenty per cent for remittance beneath LRS in addition to for the acquisition of abroad tour programme packages and eliminated the brink of Rs 7 lakh for triggering TCS on LRS.
These two modifications weren’t relevant when the remittance is for schooling or medical goal. These amendments had been to take impact from July 1, 2023.
“In response to the comments and suggestions, it has been decided to make suitable changes. Firstly, it has been decided that there will be no change in the rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of the mode of payment, for amounts up to Rs 7 lakh per individual per annum.
“It has additionally been determined to provide extra time for the implementation of the revised TCS charges and for inclusion of bank card funds in LRS,” the finance ministry said.
For the purchase of an overseas tour programme package, the TCS shall continue to apply at the rate of 5 per cent for the first Rs 7 lakhs per individual per annum; the 20 per cent rate will only apply for expenditure above this limit, the ministry added.
(With inputs from PTI)