20% TCS on all international transactions done using a credit card

[SSV]

Hmm. If that's the case, it's going to be very off-putting. :/

The key terms here are

LRS



and all expenses other than Education and Medical..




unless there is any specific exemption like what iNokia was mentioning above, which I haven't come across any such official notification yet..

 

[CARDBITRAGE]

The key terms here are

It's highly unlikely they will have any threshold for categories other than education or medical-related spends. Considering what happened with Niyo Global, banks are going to play it safe until they can somehow devise a way to know if the 7L limit has been breached taking into account all channels.

 

[SSV]

This was aptly said like below in one of the leading financial dailies...

 

[ARV]

Is there any notification / official communicatoin about this?? If this is the case, I will be happy...

Its already posted in previous discussion

20% TCS on all international transactions done using a credit card

Next year ______________ hai. 2025 se ................................ Wait! 2025 se Likely Inheritance Tax!!!!

www.technofino.in

Please read. Below is the website link:

Clarification regarding applicability of Tax Collection at Source to small Debit/Credit Transactions under LRS

Concerns have been raised about the applicability of Tax Collection at Source (TCS) to small transac

pib.gov.in

 

[iNokia]

Is there any notification / official communicatoin about this?? If this is the case, I will be happy...

 

[SSV]

Its already posted in previous discussion

20% TCS on all international transactions done using a credit card

Next year ______________ hai. 2025 se ................................ Wait! 2025 se Likely Inheritance Tax!!!!

www.technofino.in

Please read. Below is the website link:

Clarification regarding applicability of Tax Collection at Source to small Debit/Credit Transactions under LRS

Concerns have been raised about the applicability of Tax Collection at Source (TCS) to small transac

pib.gov.in

Great , thank you for mentioning it. Good to see that some common sense prevailed. It seems this still has to be communicated down to the ground level...
I don't know how they keep track of 7 lakh limit per FY... that is topic for another day...

 

[ARV]

Great , thank you for mentioning it. Good to see that some common sense prevailed. It seems this still has to be communicated down to the ground level...
I don't know how they keep track of 7 lakh limit per FY... that is topic for another day...

Yes, but the important point to note is after 7L its 20%. Earlier it was 5%

 

[SSV]

Yes, but the important point to note is after 7L its 20%. Earlier it was 5%

That is also true. atleast the small fishes are exempted for doing some foreign e commerce transactions...
Still, there will be significant compliance costs to be borne by honest tax payers with this law, to catch 5% , they are troubling 95%..

 

[Deleted member 9785]

new update

 

[miles_guy]

That's what happens when you don't think things through...

 

[CARDBITRAGE]

new update

Will this affect hotel bookings? Yes. How about tour bookings? Absolutely not. I don't think overseas agents can provide the same service as domestic tour agents. The only thing that is affected here is the limit in people's spending power due to capital getting locked up with the government.

 

[Sandy Singh]

I still don’t completely understand. Let’s say I book 2 hotels with my credit card for a foreign trip. One from an Indian site like Easymytrip in ₹ (50k) and the other from Booking.com in $ (50k ₹), so total is ₹ 1L.

Now does hotel booking come under tour package or general credit card spends?

Will I have to give TCS on my booking from Booking.com? Or from both sites? Or neither of them if total has not exceeded 7L?

Also let’s say now I booked a one day tour of some city from Booking.com in $, do I need to give 20% TCS on that?

 

[burugu]

Ill be paying visa fees of 2 person approx 55000rs per person around 20june and i was thinking of using magnus cc for monthly milestone so do i have to pay 20% on that??

If we book international flight ticket in Indian currency website (like ethihad or Qatar). Is this will come under 20 percentage tcs ?

 

[CARDBITRAGE]

If we book international flight ticket in Indian currency website (like ethihad or Qatar). Is this will come under 20 percentage tcs ?

I still don’t completely understand. Let’s say I book 2 hotels with my credit card for a foreign trip. One from an Indian site like Easymytrip in ₹ (50k) and the other from Booking.com in $ (50k ₹), so total is ₹ 1L.

Now does hotel booking come under tour package or general credit card spends?

Will I have to give TCS on my booking from Booking.com? Or from both sites? Or neither of them if total has not exceeded 7L?

Also let’s say now I booked a one day tour of some city from Booking.com in $, do I need to give 20% TCS on that?

I'll keep this plain and simple.
1. Don't enable international transactions. If your transaction goes through for your flight/hotel booking(settles in INR), it won't even come under the TCS radar.
2. Hotel does not come under tour packages. A tour package is a bundled product that is often offered by tour agents and operators. Eg- Go to MakeMyTrip(holidays section) and select any international package. At the payment page, you will see 5% TCS(current rate) being applied by default. Now, after 01.07.2023, this will be revised to 20% TCS irrespective of your payment method. I hope this clarifies.

 

[Sandy Singh]

So if I disable international transactions, I won’t be able to book hotels and flights from any site in $ or any other currency. If I do such transaction, will I have to give 20% tcs?

 

[CARDBITRAGE]

So if I disable international transactions, I won’t be able to book hotels and flights from any site in $ or any other currency. If I do such transaction, will I have to give 20% tcs?

Above was just a recommendation I gave so you can easily filter out any Forex transactions. So in case your transaction fails, you can enable international transactions and record that spend for your future reference. And yes, I think 20% TCS will be charged for that particular transaction and it should reflect in your statement. We will have to wait and see whether TCS will be charged from the initial forex spend, or 7L threshold will be respected.

 

[tdot]

I’m not sure but can’t this be circumvented by buying forex card in india with your CC ?

 

[CARDBITRAGE]

I’m not sure but can’t this be circumvented by buying forex card in india with your CC ?

Purchasing forex currency of any kind or form will come under LRS. No way to escape as our pan will be recorded during purchase.

 

[gurbina]

I’m not sure but can’t this be circumvented by buying forex card in india with your CC ?

TCS shall be applicable at 20% on forex cards and cash exchanges without any threshold limit unless a specific clarification is issued by the relevant authorities. h

let us say that when travelling abroad with family in a certain financial year, someone spends ₹5 lakh on a credit card, and ₹5 lakh on a debit card. The first spend of ₹5 lakh from the credit card will not attract TCS as it is below the threshold of ₹7 lakh. The next spend of ₹5 lakh from the debit card will attract TCS in the following manner – there will be no TCS on ₹2 lakh, but a TCS @ 20% will apply on the balance ₹3 lakh. “However, if one uses a forex card, TCS @ 20% will be applicable on the amount of the foreign exchange credited to the forex cards without any exemption limit,” says Riaz.

Some hope exists for the salaried class

the Indian government recently announced that it intends to automate the process of granting immediate TCS credit in case of salaried taxpayers. “The government proposes to link, and grant 20% TCS as credit against the monthly TDS due on the salary income of taxpayers. Procedures, and further announcements in this regard are expected in the coming weeks,” says Srinivasan

From:

New TCS regulations may pinch your wallet while travelling abroad. Here’s how you can minimise the impact | Business Insider India

A threshold relaxation of ₹7 lakh per financial year from TCS has been given only for overseas spending using international debit or credit cards. TCS shall be applicable at 20% on forex cards and cash exchanges without any threshold limit unless a specific clarification is issued by the...

www.businessinsider.in

 

[Sandy Singh]

Any transaction done in India on a foreign portal will attract TCS at 20% right? or that is also exempt till 7L?