TCS on Credit Card calculation: How much extra will you have to pay on an international trip?



There’s a piece of bad news for travellers using international credit cards abroad. Not only the transactions done abroad have been brought under the Liberalised Remittance Scheme of the Reserve Bank of India (RBI), but every dollar spent abroad will also attract 20% of TCS – Tax Collected at Source.

The Central government has notified the amended rules under the FEMA to include international credit card transactions in the Liberalised Remittance Scheme.

Till now, one was able to use international credit cards when abroad without worrying about LRS and TCS. However, from July 1, 2023, such transactions will have to adhere to the RBI’s LRS rules. LRS specifies current and capital account transactions that are allowed to Indian residents and each transaction has a fixed rate of TCS. For example, the TCS rate for sending money for education or medical expenses is different from rates when investing abroad.

Also Read: Plastic Money for NRIs: Keep an eye on exchange rates

Adhil Shetty, CEO,, says, “TCS has been applicable on foreign remittances since 1961, and the LRS since 2004. Over the years, there have been several changes in how much TCS is deducted and in what situation. Prior to this amendment, all forex instruments, foreign currency, forex cards, debit cards, etc., attracted a TCS. The only exception was credit cards. So, to remove the differential treatment between debit cards and credit cards and to capture the total expenditures under LRS, credit cards have also been brought into the ambit of TCS on LRS.”

What is more troublesome for international card users is the non-existence of any threshold limit. 20% TCS will be applicable for all international card spends with no threshold.

The direct impact of this new 20% TCS rule is that one will have to keep ‘extra’ funds handy – Your card needs to have a higher limit. “New rules mean that your forex expenses will go up by 20%. Say, you were to go abroad and spend USD 2500 for your travel and stay and other expenses. If USD 2500 is sold at the rate of Rs 84 per USD, then currently you would roughly need Rs 2L (excluding conversion charges and GST) to purchase the required USD. After 1 July, you will need to pay an additional 20% as TCS. This means you will need to pay Rs 40,000 more to purchase the same USD 2500,” explains Shetty.

The tax will be collected by the credit card company and be reflected on the cardholder’s statement. The 20% TCS rule is applicable to not just credit cards but also to forex cards, debit card spends, as well as currency purchases.


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