20% TCS regime from October 1; no TCS on use of international credit cards while overseas

The earlier Rs 7 lakh threshold exemption for LRS and TCS will also be restored and the Finance Act amendments which had withdrawn this will stand nullified with legislative amendments .

The Finance Ministry has said, “Legislative amendment in this regard shall be proposed in due course. Circular and Frequently Asked Questions (FAQs) shall be issued to clarify various practical issues in implementing this provision”.

All remittances , except overseas tour packages, will attract Nil TCS upto Rs 7 lakh. For overseas tour packages however, five percent TCS will be levied upto Rs 7 lakh spend. And beyond Rs 7 lakh 20 percent TCS will apply. Under LRS for other purposes too, the TCS rate will increase to 20 percent from the current five percent from October 1. While health and education remittances will continue at the earlier five percent or 0.5 percent rates as the case maybe, beyond the Rs 7 lakh threshold.

“Till 30th September, 2023, earlier rates (prior to amendment by the Finance Act 2023) shall continue to apply, and the increase in TCS rates which were to come into effect from 1st July, 2023 shall now come into effect from 1st October, 2023 “ the Finance Ministry statement said.