TCS will not be applicable on credit card expenses abroad, now the new rule will be applicable from October 1

According to the new rules of the Ministry of Finance, now no TCS (Tax Collected at Source) will be levied on any expenditure made abroad by credit card. However, while living in the country and paying abroad through International Credit Card and this payment is more than seven lakh rupees in a financial year, then 20 percent of TCS will have to be paid on it. On Wednesday, new rules related to TCS were issued by the ministry.

Credit cards have been kept out of the purview of TCS for the time being till a suitable IT network solution is found between the bank and the credit card. However, if you go abroad and spend more than seven lakh rupees in any one financial year, then it will be taxed from 0.5 percent to 20 percent.

The new rules related to TCS were earlier to be implemented from July 1. Now this date has been changed to October 1. No TCS will have to be paid for spending up to Rs 7 lakh in a financial year abroad for studies and treatment. 0.5 percent on the expenditure of more than seven lakh rupees on education through loan and five percent TCS will have to be paid on spending more than seven lakh rupees on treatment.

In the Financial Bill 2023, on behalf of the Central Government, the rate of TCS was increased from 5 percent to 20 percent on the purchase of foreign tour packages with remittances under LRS. Along with this, the limit of Rs 7 lakh available in this was also removed.

The Finance Ministry said in its statement that due to the suggestions, we have decided to make some changes to it. For the time being, there is no change in the rates of TCS for the purchase of foreign tour packages and all others under LRS. Irrespective of the mode of payment. This is on 7 with a limit of up to Rs.