TravTalk India Online Magazine
All-India Association of Authorized Money Changers & Money Transfer Agents appeals for level-playing field in overseas transactions. It has asked for foreign currency bank notes, forex prepaid cards and wire transfers into TCS exemption to debit, credit cards under LRS.
Hazel Jain
The money exchange industry has asked the Union Government to extend the Tax Collected at Source (TCS) exemption given to debit and credit card transactions under Liberalised Remittance Scheme (LRS) to other forex instruments such as foreign currency bank notes, forex prepaid cards and wire transfers.
The demand comes after the Union Finance Ministry stated that, from July 1, transactions carried out overseas using debit and credit cards will be exempted from the 20 per cent TCS up to `7 lakh per financial year. But no specific guidance has been issued regarding other widely used global payment options, including foreign currency cash, wire transfers through banks, prepaid forex cards, and various other modes of global transactions frequently used by individuals during overseas trips for both leisure and employment purposes.
TC Guruprasad, Vice Chairman, All India Money Exchange and Money Transfer Association, said, “The notification will have a direct impact on individuals travelling abroad for work, especially the labour/ working class, who belong to the low-income group and have no access whatsoever to card payment facilities. This group generally procures cash from the money exchange outlets operating at international airports or city outlets and a levy of 20 per cent TCS on such transactions will be a blow to them as they do not fall under the income tax bracket.”
The industry seeks the government to extend the TCS exemption to the purchase of cash, wire transfers, and prepaid forex cards. The association remains committed to advocating for a fair and equitable environment for all individuals engaged in overseas transactions. It is imperative to address the concerns of economically weaker sections, first-time travellers, and the labour and working classes to ensure inclusive policies and practices, it stated. The money exchange industry expects the Union government to ensure a level-playing field for all overseas transactions, regardless of the mode of payment used.
Travellers use options such as foreign currency cash (within the permissable limits of US$3,000 or its equivalent), prepaid forex travel cards, wire transfers, debit, and credit cards. It is must be noted the common man, particularly first-time travellers, often lack awareness about the forex requirements while travelling abroad.
