PM Modi gives huge relief to Middle Class Indians after waiving off 20% TCS On Credit Cards under LRS | Technical, Finance, Investment Questions

PM Modi gives huge relief to Middle Class Indians after waiving off 20% TCS On Credit Cards under LRS

Archana Ashar

7 months ago

In our previous article about 20% TCS on LRS, we have covered everything about LRS and TCS.

After getting a lot of suggestions on Twitter and Social Media, now Indian government have made some below changes to TCS on 19th May 2023.

Government have waived off 20% TCS under LRS if spending on International Debit or Credit Card is upto Rs 7 lakhs Per Financial Year.

Liberalized Remittance Scheme (LRS) Amendment:

Indian government have amended Foreign Exchange Management Act (FEMA) on 16th May 2023.

Credit Card or International Credit Card has been added under Liberalized Remittance Scheme (LRS).

TCS rate has been increased from the current 5% to 20% effective from July 1, 2023.

If total spending on International Debit or Credit Card is upto Rs 7 lakhs Per Financial Year, it will not come under LRS and hence it will not attract any TCS.

Example:

So Basically with new changes announced by government on 19th May 2023, if Rohan visits Singapore and uses his Debit or Forex Card or Credit Card in Singapore, 20% TCS will be charged on all his overseas Transactions only if his spending is more than 7 Lakh Per Financial Year.

Rohan visits Singapore and he has a Credit Card with limit of Rs 10,00,000.

He uses his Credit Card to pay for all transactions in Singapore like Hotels Bills, Shopping, Food and Travelling.

If he spends total 7,00,000 Rupees in Singapore from his Credit Card, Credit Card company will not charge any TCS from his Credit Card and his total Credit Card statement will be 7,00,000 only.

Total Spend : 700,000 INR

0% TCS Charged : 0 INR

Total Credit Card Bill : 700,000 INR

Conclusion:

Modi government have given relief to all Middle Class people after waiving off 20% TCS under LRS if spending on International Debit or Credit Card is upto Rs 7 lakhs Per Financial Year.

Most of the Middle Class family which goes on overseas trip, 7 Lakh is very much sufficient.

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