Tax Collected at Source (TCS) on Foreign Remittances Hiked to 20%

TL;DR: Your credit card payments will be subject to a 20% Tax Collected at Source (TCS) now.

Earlier this was 5%. But, from 1st July 2023 here’s what’s going to happen:

  • Investing overseas, travelling abroad, buying foreign currency, gifts, lending loans to relatives abroad will now be taxed at 20% instead of 5%.
  • Exceptions to this will be education and medical expenses.
  • The reason for this move - Many people were making high-value remittances abroad but their tax returns didn’t reflect this.

Additional Information: From studying abroad to holidaying overseas: How foreign remittance will be taxed from July 1 - Times of India