Big relief! Modi Govt says no 20% TCS on Debit, Credit Card payments up to Rs 7 lakh under LRS

Responding to concerns of taxpayers over the imposition of 20% TCS on International Credit Card and Debit Card transactions under the Liberalised Remittance Scheme (LRS) from July 1, the Central Government today said no TCS will be collected on small transactions up to Rs 7 lakh.

“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,” the Government said in a statement.

“Existing beneficial TCS treatment for education and health payments will also continue,” it added.

Meanwhile, the government also said that necessary changes to the Rules (Foreign Exchange Management (Current Account Transactions Rules), 2000) will be issued separately.