Indian Government Relaxes Tax Regulations on International Transactions
The Government of India has announced important changes regarding international transactions made by individuals. According to the latest guidelines, any payments made using international debit or credit cards up to Rs 7 lakhs per financial year will not be considered under the Liberalised Remittance Scheme (LRS) limits. Consequently, these transactions will not attract any Tax Collected at Source (TCS).
A Relief to Cardholders
This comes as a significant relief for Indian individuals who frequently engage in international transactions. The exclusion of such payments from the LRS limit and the non-application of TCS will provide greater flexibility and ease of use for international credit and debit cards, facilitating smoother and more affordable cross-border transactions.
Continuation of Beneficial TCS Treatment
The government has also assured that the existing beneficial TCS treatment for education and health payments will continue. This announcement is particularly relevant for Indian students studying abroad or individuals seeking international health services. The continuity of this beneficial treatment ensures that these essential sectors remain affordable and accessible for Indian citizens, despite their international nature.
Impact on Indian Consumers
These latest changes to India’s tax regulations on international transactions mark a significant step towards easing the financial burden on consumers. By excluding certain transactions from the LRS limit and preventing the imposition of TCS on these transactions, the government is promoting more accessible and affordable international financial activity for Indian consumers. It also reassures individuals that their essential educational and health expenses will continue to receive beneficial tax treatment.