Credit Card TCS: The Income Tax Department is considering making a provision for giving appropriate information to the card issuing bank in a fixed period in case TCS is levied on the expenses incurred through credit card abroad.
It is possible that the bank will have to inform about the purpose of spending abroad through credit card, the Income Tax Department will issue the card in case of TCS (tax collected at source) on the expenditure incurred through credit card abroad. Is considering to make a provision to give proper information to the paying bank within the stipulated period. Official sources said that in this context, the Income Tax Department is also in talks with the Reserve Bank of India and other stakeholders to make an appropriate arrangement.
Which rule is being discussed?
The discussion is going on at this point that the purpose of credit card spending abroad should be given to the issuing bank within a fixed time. If the amount spent abroad is for education or medical treatment, then 5 percent TCS will be charged on it, while 20 percent TCS will be charged on the expenditure for other purposes. The provision of imposing TCS is going to be applicable from July 1 on the expenses made by credit cards abroad.
Tax department will issue FAQs on TCS
The Income Tax Department will also issue a detailed list of questions and answers regarding the process related to TCS charges levied on foreign currency expenses incurred under different heads. From the next month onwards, 20 per cent fee will be charged if the expenditure incurred abroad on credit card exceeds Rs 7 lakh. However, if there is expenditure related to education and medicine, this fee will be reduced to five percent. For those taking loans for education abroad, a fee of 0.5 percent will be charged on the amount above seven lakh rupees.
