Jobaaj Stories
As per the press release issued by the Press Information Bureau (PIB) Delhi on May 19, 2023, the government has clarified the rules related to the Tax Collection at Source (TCS) for small transactions under the Liberalized Remittance Scheme (LRS). Starting from July 1, 2023, if anyone makes the payment using their international debit or credit card and the total amount is up to Rs 7 lakh per year, they won't have to pay TCS.
This decision is meant to make things easier for people who frequently make international transactions. It will remove any confusion and make cross-border transactions hassle-free. If you're using your card for education or health-related payments, you will still receive the same benefits as before.
To implement these changes, the government will update the rules called the Foreign Exchange Management (Current Account Transactions Rules), 2000. These changes will be explained clearly and will guide banks and individuals on how TCS exemptions will work for small debit/credit transactions under the LRS.
The government wants to simplify cross-border transactions and give people more freedom to manage their international finances. By excluding small transactions from TCS, individuals can use their cards without worrying about extra taxes. These new rules will also encourage international trade, travel, and education, which will contribute to the country's economic growth.
Overall, this clarification on TCS for small transactions under the LRS will make doing business easier and help people with their international financial activities.
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