Credit card holders will now be taxed?

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Credit card not only grant regular travellers freedom to travel, but also free access to airport lounges and discounted airfare. So it turns out that Indian travellers have been avoiding paying tax collectible at source while enjoying the benefits of swiping (TCS).

Credit card holders will now be taxed?In order to solve this, India’s Finance Minister Nirmala Sitharaman has submitted a law that will allow tax deductions on credit card purchases made for international travel under the liberalised remittance plan.

Credit Card Holder’s traveling abroad going to get pricey?

  • This action comes in response to a recent plan to increase the TCS on international tour packages from 5% to 20%, raising the price of international travel.


  • The minister emphasised that those who used credit cards were exempt from the tax and instructed the Reserve Bank of India to create a method for remitting taxes at the point of sale.


  • The Union Budget for 2023 featured a proposal to include TCS as a type of outbound remittance, or money sent outside of the nation.

How do outbound transfers operate?

  • When a customer pays for air tickets and international tours once the bill is passed, travel agencies and airlines will be permitted to deduct tax from the price.


  • In terms of the 2004 liberalised remittance programme, up to Rs 2.5 lakh may be freely sent abroad.
    Any transaction that exceeds that threshold requires Reserve Bank of India approval.


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