Your credit card payments overseas will attract a 20% TCS from July 1

From July 1, your credit card transactions abroad will get costlier. Not only will you have to pay a higher tax collected at source (TCS) of 20 per cent on each of these transactions, but you will also have to limit the spending to under $250,000 in a financial year.

The Centre has amended the Foreign Exchange Management Act (FEMA) rules, bringing international transactions via credit cards under the Liberalised Remittance Scheme (LRS). With this, international spending using credit cards will attract a 20 per cent TCS. The new rule will come into force on July 1.