New TCS norms on credit card spends: More than a matter of exchange

Money changers are miffed at the tax exemption for credit card forex spends of up to Rs 7 lakh a year under the liberalised remittance scheme

Money changers are miffed at the exemption granted on credit card spends of up to Rs 7 lakh a year under the liberalised remittance scheme (LRS); only expenditure above this threshold will be subjected to 20 per cent tax collection at source (TCS).

This, even as there is no clarification coming forth on its applicability to small-value transactions involving cash forex, wire transfers through banks, and prepaid forex cards. The All India Association of Authorised Money Changers & Money Transfer Agents’ (MACMTA) argues that this privileges credit cards based on the form-factor of transactions.

Money-changing — or, the sum of