New Delhi (TIP)- The Union government tweaked the imposition of 20 per cent Tax Collection at Source (TCS) on transactions through international credit cards and debit cards under the Liberalised Remittance Scheme (LRS) from July 1 by clarifying that the applicability will only be after a limit of Rs 7 lakh has been breached in a financial year. Faced with massive social outrage, the Finance Ministry admitted that concerns have been raised about the applicability of TCS to small transactions under the Liberalised Remittance Scheme (LRS). “To avoid any procedural ambiguity, it has been decided that any payments by an individual using their international Debit or Credit cards upto Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS,” it said in a statement.
It also clarified that the existing beneficial TCS treatment for education and health payments will also continue. The necessary changes to the Rules (Foreign Exchange Management (Current Account Transactions Rules), 2000) will be issued separately, added the Finance Ministry statement. Earlier, several analysts had termed the blanket imposition of TCS as a disaster because it would have been a compliance nightmare for many traveling for tourism. They had pointed out that rather than being an indirect measure to support the domestic tourism industry which was the worst hit during the pandemic, it would actuallydiscourage many residents from travelling overseas.
Govt to get Rs 87,416 crore dividend from RBI
The Reserve Bank on India (RBI) on Friday, May 19, approved Rs 87,416-crore dividend payout to the Central government for 2022-23, nearly triple of what it paid in the previous year.
The dividend payout was Rs 30,307 crore for accounting year 2021-22.
The decision was taken at the 602nd meeting of the Central Board of Directors of Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.
“The Board approved the transfer of Rs 87,416 crore as surplus to the central government for accounting year 2022-23, while deciding to keep the Contingency Risk Buffer at 6 per cent,” RBI said in a statement.
The Board also reviewed the global and domestic economic situation and associated challenges, including the impact of current global geopolitical developments.
The Board also discussed the working of RBI during 2022-23 and approved the annual report and accounts of the central bank for the year.