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Now 20% TCS On All International Txns Incl Credit And Debit Cards

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guest_999

Around 1 month ago a new rule was announced by govt putting 20% tcs on all international txns & after much discussion the consensus seem to be that it only applied to foreign remittance & not typical international online txns done on international ecomm sites using cards. However it is now confirmed that this applies to all international txns even those done using cards.

https://timesofindia.indiatimes.com/business/in...

MUMBAI: Banks fear that usage of cards for cross-border transactions could see a dip because of the imposition of tax collected at source (TCS) on such transactions. Some said that this was going against the earlier objective of fuller capital account convertibility.
Speaking on the Finance Bill 2023 in the Lok Sabha, finance minister Nirmala Sitharaman said that cross-border credit card payments are currently not captured under the liberalised remittance scheme (LRS), and they escape the TCS. The finance minister said that the Reserve Bank of India (RBI) would take steps to ensure that these transactions come under the ambit of TCS.

The announcement came as a surprise to banks. Speaking to TOI, a senior banker said that the details of foreign transactions are already available and can be shared with the tax authorities. What the TCS on such transactions would do would be to force everyone making a cross-border transaction to file returns.
“Credit and debit cards are used largely for personal consumption expenditure and not for remittances,” said Sandeep Ghosh, Visa’s group country manager in India and South Asia. He added that there had been a substantial shift in cross-border payments from cash to cards and digital payments in recent years.
“The TCS on international card payments may inhibit the usage of cards for these transactions. As an industry, we would be keen to work closely with the government to understand and help solve the issue they aim to address with this move,” said Ghosh.
Ebixcash World Money ED & business head M Hariprasad said, “The tax collection at source on the purchase of prepaid forex cards had already been under the purview of LRS, whereas the same is now applicable even on rupee-denominated card spends for overseas travel-related payments.”
“While the new TCS law comes into effect from July 1, the peak outbound leisure travel season is from April to June and hence may not be able to gauge any adverse impact immediately,” he added.
Bankers said that it is not just the rich who make cross-border payments. Credit cards are used to make cross-border payments for software, internet services, educational material and online courses. Some foreign exchange money changers say that the tax collection could lead to an increase in the operations of unofficial money changers.


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Benevolent Benevolent
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long live Adani and Ambani

This will have a negative impact on forex flow as those who go to a foreign country and earn in foreign currency would now prefer to keep the money in foreign acct instead of bringing them to India.

Finance Mentor Finance Mentor
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FM seems to be making sure that whatever Adani had lost in market capitalization, comes back to him through such stupid and nonsense laws/amendments. 

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Finance Ninja Finance Ninja
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Very good step.

Mai kab se chahta tha. Aisa kuch step liya jaye. Mai jo chahta hu ek na ek din ho he jata hai.

Kabhi kabhi lagta hai apun he bhagwan hai. 😛

But 20% kuch jada hai aur sahi kaha hai "Some foreign exchange money changers say that the tax collection could lead to an increase in the operations of unofficial money changers."

Aur China k tarah Indian govt ko incentives dene chahiye direct customers ko International transactions RuPay Card or UPI se karne par but hai RuPay Card or UPI abhi ready bhi nhi hai har jagha international transaction k liye.

Critic Critic
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But bhai agar upi aur rupay card bhi available hotey intl txns kay liye tab un par bhi ye 20% tcs lagta toh what's the difference.
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Deal Subedar Deal Subedar
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For someone planning to move abroad, how will this affect their current expenditure? 

Typically, students pay for general tests, application fees, first-semester tuition, and insurance through international payment gateways from India. I assume that these expenses will take a hit, but I'm not sure if ATM withdrawals through NiYO Global/Forex will also be affected.

Deal Newbie Deal Newbie
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I'm curious too



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The PostMighty The PostMighty
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Btw what to expect from this govt... That aunty was defence minister and role was straight away switched to finance minister 2 years ago ! joy

Toh aise logon ka kya Gyan aur ek expect karoge... Meanwhile moodi used political power to jail RaGa ..pehle freedom of speech gaya ab democracy! Aage aage dekho kya hota hai

Aur ek chiz batao , Microsoft certification ke liye toh Pearson vue se payment karte the woh bhi foreign transaction ho jayega kya neutral_face cry

Critic Critic
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Any txn that needs you to enable "international txns" in your card setting will come under this rule.
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Deal Lieutenant Deal Lieutenant
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Government indirectly endorsing crypto. 😂

Stupid jokers.

The PostMighty The PostMighty
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Theres already 30%+ extra tds applicable on that since last year on that, basically killed the entire crypto demographic in India.Now they even hiked STT by 25% for stocks too,

The amount of indirect taxes we have to pay on goods and services on top of IT is mind boggling yet some states are heading towards bankruptcy similar to Sri Lanka,This stupid FM and ruling party needs to be thrown out.

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Savings Mentor Savings Mentor
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Has Govt of India lost their minds? There HAS to be a baseline high amount which isn't taxed. e.g. Tax above 5 lakh or something but not transactions below it!

Critic Critic
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Well it isn't exactly tax, you can get refund after filing itr but yes you need to wait anywhere from few months to a year to get back this extra 20%.

@abhishek012 That is why more chances of this being implemented as it is not exactly tax.

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Deal Cadet Deal Cadet
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log adani ambani toh eshe bolte  hai jese ki pata nahi enki jeb se kyaa chura liya . btw yeah presnt wali govt aane se pehle woh log marine drive pe vada pav ka thela lagte the enh logo k hisab se... joy laughing

Critic Critic
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@guest_999 Based on most of the articles on the web that I came across, it's going to be applicable only on credit cards, there's no mention of debit cards yet...

Critic Critic
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There cannot be a distinction between debit & credit cards in such rules(foreign currency is going outside of India in both cases).

Credit and debit cards are used largely for personal consumption expenditure and not for remittances,” said Sandeep Ghosh, Visa’s group country manager in India and South Asia.
Comrade Comrade
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Adani bhai ka loss recover karna hai...... 

Critic Critic
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Comma (,)

ref: disaster 

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Benevolent Benevolent
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It will boost Gujarat's economy which controls the entire hawala operations of the nation via Dubai-Mauritius routes😀

Deal Newbie Deal Newbie
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During British time also it took 30-40 yrs for Natives to realisr that they have became Ghulam..

Generous Generous
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Encouragement of hawala.

Finance Mentor Finance Mentor
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This would be effective by July 1, 2023. For all who are considering using cards on their forthcoming international trip, you'll have to claim this TCS back when you file your ITR for FY 2023-24 (AY 2024-25). 

So you'd definitely need to file an ITR, else use cash all the way. 

This TCS would be levied on international atm withdrawals also along with debit /credit card (and eventually UPI) pos/online transactions in foreign land /foreign merchant. 

Talk-Of-The-Town Talk-Of-The-Town
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I pay my website server fees using hdfc credit card on autopay basis. 18% gst is charged already on the amount + foriegn exchange fees. So u mean more 20% will be charged now? Or im mistaken?

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Finance Mentor Finance Mentor
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Sooner or later this "Gormint" is going to remove LTCG on equity mf, remaining hybrid funds and stocks also, leaving only stcg to be paid or sale proceeds to be clubbed with income. 

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Deal Cadet Deal Cadet
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This government is a total scam. Literally taking money from our pockets (debt funds destroyed), TCS on intnl txns with ultra delayed refunds, and even handing over national assets to their buddies. Just to ensure they are funded and remain in power. I hope they rot in hell rage

Analyst Analyst
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They will come to power next year as well. Stop them if you can stuck_out_tongue_closed_eyes

Deal Cadet Deal Cadet
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Most of the people who travel abroad but don't file ITR are butthurt with this.
Onlyfans users too.

Talk-Of-The-Town Talk-Of-The-Town
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Govt has lost it's mind.. why should one pay additional tax for international txns?

Deal Cadet Deal Cadet
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I feel bad for ppl who work so hard and want to enjoy life buying stuff from outside and asked to on top of taxes,

Imagine family sending money to their kids so they can food while studying and have to deal with this BS.

Finance Mentor Finance Mentor
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You can claim it back. It's not the end of the world! 

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Deal Cadet Deal Cadet
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File returns, get refund.

Deal Cadet Deal Cadet
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Andher Nagri, Chaupat Raja. Enjoy dictatorship, reverse journey towards stone age and golden era of andhbhakti / whataboutery. Desh badal gaya hai .. piche hat Gaya hai.

All making fun of Raga, Kejriwal here can you imagine your 'yashashvi' leader appearing in 1 press conference and taking media questions like them!

Not questions like: aapke batue mein kitne paise hain, aapko itni urja kaise milti hai ... !

Anyway, I am highly at risk of being trolled due to this post. I should have thought positively ki Desh ke liye international transactions pe 20% tax nahi de sakte!

I renew professional certifications from international organizations every year of around 250$. Now for a transaction which has no remittance, no service rendered in India, I will have to pay 50$ to 'middle class ko looto' tax kitty of government!

Waah ..... Ji wah

Finance Mentor Finance Mentor
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You can claim it back as tax deduction while filing ITR.

View 34 more replies
Wingman Wingman
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dd-1679829207923Is this because of the new law? Some websites not accepting payments from indian users
Finance Mentor Finance Mentor
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Wow. That sucks 

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Wingman Wingman
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Screenshot20230326-164804Some international websites not accepting payments from Indian users as u can see in screenshot. Is this because of the new law passed few days back? 
Deal Cadet Deal Cadet
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This is year old issue and to do with Nexus not wanting to pay tax to India. I posted a source somewhere which describes the situation but it got merged in this thread somewhere. 

Deal Cadet Deal Cadet
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Rules are not in effect yet. Btw where did you find this image

Wingman Wingman
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Nexusmods site.. was just browsing and saw this..

Deal Cadet Deal Cadet
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Update: its a year old issue. Nexus mods (game mods website) was contacted last year by India to give tax on digital goods sold in India. They refused citing loss in accounting and so they have blocked Indian payments for a year now. 

Representative from Nexus mods says "Unfortunately, India does not have a minimum threshold and we are legally culpable to pay tax in India if a single Indian resident buy's Premium Membership on our site.

The amount we earn from Indian residents would never outweigh the cost of paying for an Indian accountant to process the tax forms and payments for us each month, nor would it be worth our time to do the work manually, so we've sadly had to block payments from India so we do not get sued by your government's tax services for breaking their rules."

Source: https://forums.nexusmods.com/index.php?/topic/1...

Benevolent Benevolent
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Very good move. This will make sure more people will file IT return. 

Every year around 2 Crores indian travel abroad for some or the other reason. Deducting TCS will mean anyone who is not filing return has to start filing return.

Infact having credit card should mandate filing ITR, or cancel all the credit cards in the country. 

Finance Mentor Finance Mentor
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Expecting quite hard hit to stock markets on Monday and Tuesday. Time to buy Nifty fund! 

Cool Cool
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Need clarification


Nifty fund not suitable when downfall market?

Nifty fund not affect when hard time?


You thinking for accumulation at low price or something else
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Deal Subedar Deal Subedar
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will the interantional payment towards certification or professional courses also attract TCS?

Benevolent Benevolent
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9174505images-30

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