The finance ministry has amended rules under the Foreign Exchange Management Act (FEMA) to bring international credit card spending under the Liberalised Remittance Scheme (LRS).
Put simply, credit card spending in a foreign currency will now be a part of LRS's annual limit of $2,50,000 per person. Further, it will be subject to tax collected at source (TCS).
This move came after Finance Minister Nirmala Sitharaman, while moving Finance Bill 2023 in the Parliament, asked the Reserve Bank of India (RBI) to look into ways to bring credit card payments on overseas tours under LRS.
Credit card payments under LRS: What changes
