The government of India has decided not to charge tax on overseas spending up to Rs 7 lakh in a year using debit or credit cards. This decision comes after criticism from the public over the government’s earlier decision to impose a tax collected at source (TCS) on all spending. The government had included overseas credit card spending under the Liberalised Remittance Scheme (LRS), which meant that any spending using credit cards overseas would attract a 20% tax from July 1. Debit card spending was already part of LRS.
However, the move to charge TCS was met with criticism from the public, with some calling it “tax terrorism”. In response, the government announced on Friday that no TCS will be deducted on overseas spending of up to Rs 7 lakh using any debit or credit card.
This decision aims to ease concerns that the TCS would negatively impact those who travel abroad frequently or for business purposes. The government hopes that this decision will help reduce the burden on taxpayers and promote ease of doing business in India.
The government’s decision is expected to benefit those who travel abroad for personal and professional reasons. It is also seen as a positive step in promoting international travel and trade.
