Team Blitz India
NEW DELHI: No tax will be charged on overseas spending of up to Rs 7 lakh in a year using debit or credit as it looked to douse backlash from its earlier decision of levying TCS on all spending, the Government has announced.
The Government had earlier this week brought overseas credit card spending under Liberalised Remittance Scheme (LRS). This meant that any spending using credit cards overseas would attract a 20 per cent tax from July 1. Debit card spending was already part of LRS.
However, the move to levy tax collected at source (TCS) attracted criticism with some calling it “tax terrorism”.
On May 19, the Government said no TCS will be deducted on the spending of up to Rs 7 lakh overseas using any debit or credit card.
Currently, overseas medical treatment and education expenses up to Rs 7 lakh a year is exempt from TCS. A 5 per cent levy is charged on expenses exceeding Rs 7 lakh.
