For those of you who also use credit cards, there are some crucial updates. Customers who use credit cards will now need to provide the bank with comprehensive information about their purchases. According to the information provided, the Income Tax Department is considering implementing a provision to provide the card issuing bank with the necessary information within a set timeframe in the event that TCS charges are assessed on expenses incurred using credit cards while traveling abroad.
RBI provided details.
According to official sources, the Income Tax Department is also in discussions with the Reserve Bank of India and other parties to come to an agreement in this regard. At this stage, it is being discussed whether the issuing bank should be informed within a specific timeframe of the reason for using a credit card abroad.
What is the price of TCS?
When money is spent overseas for education or medical care, 5 percent of TCS is applied; when money is spent abroad for other reasons, 20 percent of TCS is used. Beginning July 1, the law applying TCS on foreign credit card purchases will be in effect. The Income Tax Department will also publish a thorough FAQ on the procedure for TCS charges assessed on foreign exchange expenses made under various headings.
A 20% fee will be assessed.
If an overseas credit card purchase exceeds seven lakh rupees from next month, a 20% surcharge will be applied. However, this fee will be lowered to 5% if there are expenses for healthcare and education. A fee of 0.5 percent will be added to any amount borrowed for international education that is higher than seven lakh rupees.
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