Spending on credit cards will be subject to LRS and subject to a 20% tax


Yes, credit card spend in forex is now subject to the Liberalised Remittance Scheme (LRS) and is taxed at 20%. The Reserve Bank of India (RBI) has recently imposed a 20% tax on credit card spends in foreign currency, in line with the LRS regulations.

Under the LRS, an Indian citizen or company can remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both. Transactions exceeding this limit are subject to the 20% tax. This tax is applicable to all credit card spends in foreign currency, regardless of the cardholder’s country of residence.