Taxing International Credit Card Transactions- Under the Liberalized Remittance Scheme
From Current Affairs Notes for UPSC » Editorials & In-depths » This topic
Recently, the central government, in consultation with RBI, announced a 20% TCS levy on international credit card transactions outside India. This move has attracted widespread criticism.
What is LRS?
- The Liberalized Remittance Scheme is an RBI initiative introduced in 2004.
- It allows Indian residents to take funds out of the country for certain purposes without having to get prior approval from RBI as per the 1999 Foreign Exchange Management Act.
- The remittances can be for purposes like:
- Investment in international financial markets
- Transfer funds/ gifts to family/ friends abroad
- Educational expenses
- Medical expenses, etc.
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