The government has said the claim by a Trinamool Congress spokesperson that banks can’t verify whether people have spent less than Rs 7 lakh a year is false.
In a fact-check post on Twitter, the Press Information Bureau (PIB) labelled as “false” Trinamool spokesperson Saket Gokhale’s tweet that claimed people will be charged 20 per cent tax collected at source (TCS) no matter how much they spend abroad.
The government on Friday announced no tax will be charged on overseas spending of up to Rs 7 lakh a year using debit or credit cards. Friday’s announcement was a follow-up to the public’s queries on the centre’s earlier announcement on charging TCS on all spends.
The PIB tweeted a screenshot of Mr Gokhale’s post and said it was a “false” claim.
“Claim: Banks cannot verify whether you have spent less than Rs 7 lakh in a year. This claim is false. The Liberalised Remittance Scheme (LRS) spends of an individual are compiled and monitored by the RBI (Reserve Bank of India),” the PIB said.
Claim: Banks cannot verify whether you’ve spent less than 7 lacs in a year.#PIBFactCheck
▪️ This claim is False.
— PIB Fact Check (@PIBFactCheck) May 20, 2023
Mr Gokhale – who was granted bail by a Gujarat court on May 6 in a money laundering case – in the tweet attacking the Modi government said the new Rs 7 lakh exemption on spends abroad is “an eyewash”.
“Banks cannot verify whether you have spent less than Rs 7 lakh a year. Ergo, you will be charged TCS on every transaction,” Mr Gokhale said in the tweet that has now been labelled as “false” by the government.
Mr Gokhale faces allegations of money laundering linked to a crowd-funding initiative, for which he was arrested by the Enforcement Directorate (ED) in January this year.
The government earlier this week brought overseas credit card spending under the LRS scheme. This meant any spending using credit cards abroad would attract a 20 per cent tax from July 1. Debit card spending was already part of the LRS.
However, the move to charge TCS received criticism. On Friday evening, the government said no TCS will be deducted on spending of up to Rs 7 lakh abroad using any debit or credit card.