Current Affairs 2023.Image Credit source: freepik
Current Affairs 2023: After a decision of the Central Government, now it will be expensive to use credit cards abroad. The new system will be applicable from July 1. Under the new system, an additional 20 percent amount will be deducted on payment by credit card. This rule will also be applicable on booking of tour packages, hotels etc. for traveling abroad. Even if you book through an Indian agency.
He will deduct TCS and add it to the bill. Till now five per cent TCS was deducted on such bookings. From July 1, 20 percent will be cut. Although you can claim it in ITR. At the same time, there has been no change in the expenditure on medical and education.
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Which rule was changed?
The Central Government has changed the Foreign Exchange Management Act (FEMA) rules. The formal order was issued by the Ministry of Finance on 16 May 2023. In this way, like Debit Card / Forex Card, Credit Card has also come under Liberalized Remittance Scheme (LRS). In fact, till now people used to spend with credit card and they did not have to give account of it separately. The government found that a large number of people crossed the limit of two and a half million dollars. For this reason the new system was implemented.
What is LRS?
Under this scheme, the Reserve Bank of India sets a limit for the expenditure of any Indian abroad. Indian citizens can spend a maximum of two and a half million dollars in a financial year. Till now it included Debit Card / Forex Card only. From July 1, 2023, credit card has also been added to it. In such a situation, 20 percent TCS will be deducted on whatever payment is made through credit card.
What is the difference between TCS and TDS?
The difference between TCS i.e. Tax Collected at Source and TDS i.e. Tax Deducted at Source is that TCS is deducted on your expenses and TDS is deducted from your income. TCS you can get back by claiming in ITR, while in TDS your amount is returned as per the rules.