Seeking to tighten the implementation of the elevated 20% tax assortment at supply norm for international remittances launched in Budget 2023-24, Finance Minister Nirmala Sitharaman on Friday mentioned the RBI has been asked to monitor using bank cards for international journey functions.
“It has been represented that payments for foreign tours through credit cards are not being captured under the Liberalised Remittance Scheme (LRS) and such payments escape tax collection at source (TCS),” Ms. Sitharaman mentioned in regards to the scheme that governs international alternate spending by Indians. “The Reserve Bank is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection on source, thereon,” she mentioned.
Tax consultants mentioned the monitoring effort might show difficult. “Credit cards usage overseas was always a part of LRS and it would be interesting to learn how RBI will monitor these,” mentioned Hemal Mehta, associate at Deloitte India. The quantity of such transactions may very well be big and information analytics could have to be deployed to scrutinise these, he identified.
