From October 1, new rules related to TCS on LRS (Liberalised Remittance Scheme) and on purchase of overseas tour package has come into effect. As per the new rules, a higher rate of 20% TCS will be levied on spending above Rs 7 lakh on foreign tour packages and LRS.

As the new taxation rules are set to trouble many travellers visiting abroad, Virender Bisht, Co-founder & CTO of Niyo believes there are some ways in which TCS can be reduced or avoided. In an email sent to FE Money, Bisht shared some of these ways. Let’s have a look:

Get a zero forex international debit card: Bisht says the TCS limit per PAN card holder is Rs 7 lakh. But if two PAN card holders split expenses and travel together, the cumulative limit can be Rs 14 lakh.

If a family of four with all members being PAN card holders travel together frequently, the limit increases per person.

Additionally, some global debit cards offer zero forex markup on international spending and on ATM withdrawals abroad along with various travel perks like free airport lounge access across the globe.

“So, overall a zero forex international debit card is a great option to save on forex plus manage TCS implications,” says Bisht.

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Get a zero forex international credit card: Credit cards are exempted from TCS. Hence the Rs 7 lakh threshold is not applicable. However, most credit cards come with high annual card charges, forex markup and 36% interest on ATM withdrawals internationally. Further, not everyone is eligible to get a credit card and every time one needs to get their credit bureau score checked which affects their credit score unnecessarily.

However, Bisht says that there are some global credit cards that are free, offering zero forex markup and low ATM withdrawal costs. You also do not require a credit score to get such credit cards.

For students planning to pursue international education, managing TCS is imperative: “In this case, parents mostly remit money to their children abroad and they should ensure they understand what falls under TCS,” says Bisht.

“They should keep track of transactions, use the right LRS codes and categorise them correctly while remitting,” he adds.

For most parents, payments are made on international portals hence they come with forex charges. It helps to have zero forex international cards which have no TCS applicable up to an aggregate of Rs 7 lakh in a financial year and come with zero forex markup charges.