Big relief! Modi Govt Exempts 20% TCS on Debit, Credit Card payments of up to ₹7 lakh a year

Credit Card payment

Modi Government Exempts Debit and Credit Card Payments up to ₹7 Lakh per Year from 20% TCS

May 20, 2023: In a significant move aimed at providing relief to taxpayers, the Narendra Modi government announced today that it will not impose a 20% Tax Collected at Source (TCS) on debit and credit card payments totaling up to ₹7 lakh per year.

The decision, which comes into effect immediately, is expected to benefit a large segment of the population.

Previously, the Finance Act 2022 introduced a provision for the collection of TCS at a rate of 20% on transactions exceeding ₹50 lakh in a financial year.

However, recognizing the burden this could place on the common man, the government has decided to exempt transactions falling within the ₹7 lakh limit from the TCS requirement.

This move is in line with the government’s efforts to promote digital transactions and encourage cashless payments in the country.

By exempting a significant portion of transactions from TCS, the government aims to alleviate the financial burden on individuals and promote greater ease of doing business.

The decision to waive TCS on debit and credit card payments up to ₹7 lakh per year is expected to boost consumer spending and drive economic growth.

It will particularly benefit small businesses and individuals who heavily rely on digital payment methods for their day-to-day transactions.

The Modi government’s emphasis on reducing the tax burden on citizens aligns with its broader agenda of promoting financial inclusion and fostering a digital economy.

This move is expected to encourage more people to embrace digital payment methods and contribute to the government’s vision of a less-cash society.

With this exemption, individuals can now carry out a higher volume of transactions without being subjected to the TCS levy, providing them with greater flexibility in managing their finances.

The decision also reflects the government’s commitment to creating a business-friendly environment and supporting the aspirations of the people.

As the nation embraces the convenience and efficiency of digital payments, the Modi government’s decision to exempt debit and credit card payments up to ₹7 lakh per year from the 20% TCS marks a significant step toward a more inclusive and progressive economy.

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