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Centre likely to include international credit cards LRS
July 14, 2023
The government hasn’t given up on its plan to bring credit cards under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), even though it went back on its earlier order to include the same, sources told CNBC-TV18.
Credit card networks, banks and authorised dealers are gearing up for this eventuality and once systems are in place to account for individual forex remittances via credit cards, an implementation date will be considered, sources said.
Consequently, the rollout will take time and the levy date for the Tax Collected at Source (TCS) levy on credit cards will be much later than October 1, 2023, when the 20 percent TCS kicks in for individual foreign remittances above ₹7 lakhs, irrespective of purpose and mode of payment.
While banks and authorised dealers are relatively better placed for the rollout, credit card networks and non-banking finance companies are mainly the ones that need time to become compliant with the LRS norms and the 20 percent TCS rate, sources say.
Card network companies like Visa, Mastercard, RuPay, Amex, Diners Club and as well as credit card issuing Non-bank Financial Companies (NBFC), all have to be ready for enabling the deduction of tax at source and report on card transactions above $2,50,000 under the liberalised remittance scheme and the purpose of the same.
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