Now 20% TCS On All International Txns Incl Credit And Debit Cards
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.
@Ramta_Jogi @Kochiro @kukdookoo @Seinfeld @kapaalaa @Demondealer @Lobogris @BubbleBoyChickenLittle @legend101 @some1anywhere @TempAcc @Ash-D
Deal Wiki
-
Last updated by: Rosh_0007
20% TCS means this amt will be considered as payment of advance tax as per your income tax return which you will have to file later so if your tax payable amt comes out to be zero then this entire amt will be refunded else it will be adjusted against your payable tax in itr & balance if any will be refunded.
TCS stands for Tax Collected at Source. In the context of this article, this tax can be collected from you when you send money abroad. Sending money doesn’t necessarily mean sending it to a person. It could even mean travelling abroad, buying assets (shopping included), and investing abroad.
The LRS, or the Liberalised Remittance Scheme, is meant to help you make international transactions easily. Before this Budget, under the LRS, the TCS was at 5% for remittances exceeding ₹7 lakh.
This TCS is now hiked all the way up to 20% from 5% for all remittances (remittance is any money you send abroad) except those concerning education or medical treatment.
The new TCS comes into effect July 1st 2023 onwards. Does this mean medical and education remittances are exempt from TCS? Nope. You’ll still be taxed at 5% for amounts exceeding ₹7 lakh.
Just reliazed that buying games on epic and Ms will trigger this tax right?
Is it for all transactions? Like buying stuff from China and paying with PayPal and all?
Crypto is the only solution
...and this TCS is not that TATA Consultancy Services.
even booking flights on foreign airline like singapore airlines now is considered as international transaction, I just tried to book a return ticket on singapore airlines ( from india, not from abroad) and transaction declined because i have disabled international transaction. i guess this will also cahrge forex txn fee and other markup charges so now onwards only possible to book through mmt like sites?
Hey Guys Please stop fighting @shivrajsingh @MrThanos ..
Will this TCS be collected for any overseas purchase using Credit Cards? Suppose I want to buy a computer part from Amazon.com for $200 (assuming they ship to my place in India), will TCS be collected in this case?
![Cred - Free 2 Month Apollo 24/7 Circle Plan Worth Rs 199 (Back) [User Specific]](https://cdn1.desidime.com/topics/photos/1779828/medium/Screenshot2024-04-24-18-22-20-90204a3e7a56d80833934821a7ecffdc0a.jpg?1713963449)
@drupal @Sudarshan61
TCS is not applicable on money remitted by NRIs from their NRO account to NRE/ foreign account. Hence, NRIs can easily remit their Indian earnings, like pension, dividend, salary, rent, investment, profits from businesses permitted for repatriation, distribution from any type of deposits, etc.
Remittance by NRIs, PIOs, OCIs from their NRO account is covered under USD 1 Million Scheme. TCS u/s 206C(1G) is not applicable on USD 1 Million Scheme of NRIs, PIOs.