{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/credit-card\/update-on-international-credit-card-expenditure-impact-on-cardholders\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/credit-card\/update-on-international-credit-card-expenditure-impact-on-cardholders\/","headline":"Update on International Credit Card Expenditure: Impact on Cardholders","name":"Update on International Credit Card Expenditure: Impact on Cardholders","description":"On May 16, 2023, the Finance Ministry struck down Rule 7 of the Foreign Exchange Management Act (FEMA), bringing forex spending through internationalcredit cardsunder the purview of the Liberalised Remittance Scheme (LRS). The LRS caps outward remittance at $2,50,000 per annum without the approval of the Reserve Bank of India (RBI). Cardholders must also pay...","datePublished":"2023-06-24","dateModified":"2024-09-02","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/#Person","name":"IndusInd Bank","url":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/update.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/update.jpg","height":400,"width":1060},"url":"https:\/\/www.indusind.com\/iblogs\/credit-card\/update-on-international-credit-card-expenditure-impact-on-cardholders\/","about":["Credit Card"],"wordCount":996,"keywords":["credit card","credit card apply","credit card apply online"],"articleBody":"On May 16, 2023, the Finance Ministry struck down Rule 7 of the Foreign Exchange Management Act (FEMA), bringing forex spending through internationalcredit cardsunder the purview of the Liberalised Remittance Scheme (LRS). The LRS caps outward remittance at $2,50,000 per annum without the approval of the Reserve Bank of India (RBI). Cardholders must also pay a TCS (tax collected at source) of 20% on foreign currency spends.On May 16 2023, the Ministry of Finance amended the Foreign Exchange Management Act (FEMA) rule, effectively bringing forex spending through international under the purview of the Liberalised Remittance Scheme (LRS). This scheme caps outward remittance at $2,50,000 per annum without the approval of the Reserve Bank of India (RBI). Additionally, forex spending through international credit cards will now attract TCS (tax collected at source) of 20%.How the New TCS Norms Will Impact Cardholders1. Cardholders Have to Comply with New Spending LimitsGiven foreign currency transactions using international credit cards will now fall under the LRS, cardholders must comply with an annual spending limit of $250k (roughly INR 2 crores). For spending above this limit, the approval of the RBI will be required.2. Cardholders Must Pay 20% TCS on Forex PaymentsThe TCS rate on overseas tour packages and funds remitted under LRS (except education and medical expenses) has been hiked to 20% from 5% in the Union Budget 2023-24. This new rate will be applicable starting July 1, 2023.Cardholders must now pay TCS at 20% on overseas tour packages purchased using an international credit card in a foreign currency. Even purchasing foreign currency from an authorised dealer on an international trip will attract a TCS of 20%. Naturally, this must be factored in while budgeting for your next international trip.Although, TCS will not be applied on individual payments up to Rs. 7 lakhs per financial year, using their international debit or credit card.\u00a0Who Collects the TCS?The credit card issuer is responsible for collecting the TCS payment. The issuing bank will also be responsible for depositing this amount with the tax authorities.This tax amount will be reflected against the cardholder’s PAN, and can be adjusted against their income tax liability for the particular financial year. Cardholders can claim a refund in the Income Tax Return (ITR) if they do not have the tax liability to offset the TCS.Apply for a Credit Card Online at IndusInd BankNow that you understand how the new TCS regime will impact transactions on internationalcredit cards, you can budget for your foreign trips accordingly.If you\u2019re looking for a banking partner that offers cards to suit your spending, turn to IndusInd Bank.      We bring you a range of domestic and international credit cards to elevate your lifestyle and support your travel needs. This includes exclusive memberships and discounts on shopping, entertainment, travel, and plenty more.Moreover, our reward points – earned on every single transaction – do not expire. This means you can use them to enjoy even more savings or you can convert them into cash to repay your monthly dues.With the right credit card from IndusInd Bank, you can maximize your savings while meeting your financial needs.Additionally, it is a seamless and 100% paperless experience to get an IndusInd bank credit card by following these steps:Visit our website and click \u2018Apply Now\u2019Start by filling in your personal detailsChoose a suitable credit card offerComplete the video KYC and sign the application digitally to get your card.\u00a0You will now receive your card in the next 24-48 hours!Disclaimer:\u00a0The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.Share This:"}