Module: | MODULE A: INTERNATIONAL BANKING
Q66: Consider the following statements regarding the usage of International Credit Cards (ICC) under the Liberalised Remittance Scheme:
1. The government has deferred the inclusion of International Credit Card spends made while physically outside India under the LRS limit.
2. Transactions made using an International Credit Card while overseas currently do not attract Tax Collected at Source (TCS).
3. Transactions made using an International Debit Card while overseas are counted towards the LRS limit and are subject to TCS.
Which of the statements given above is or are correct?
2. Transactions made using an International Credit Card while overseas currently do not attract Tax Collected at Source (TCS).
3. Transactions made using an International Debit Card while overseas are counted towards the LRS limit and are subject to TCS.
Which of the statements given above is or are correct?
✅ Correct Answer: D
🎯 Quick Answer:
All statements (1, 2, and 3) are correct.Structural Breakdown: Credit Cards (ICC): Although a notification was issued to bring ICCs under LRS, the implementation was deferred indefinitely.
As of February 2026, swiping a Credit Card while physically abroad is exempt from LRS limits and TCS.
Debit Cards: Debit cards withdraw funds directly from a domestic savings account.
These transactions are fully covered under LRS limits and TCS rules immediately.
Rationale: Banks cited significant IT challenges in categorizing the Purpose (for example, Education versus Tourism) of a credit card swipe in real-time to apply the correct tax rate.