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DCC & TCS Knowledge
Transacting Abroad? Use this one simple rule for ATM use & card swipes.
Avoid Dynamic Currency Conversion (DCC)
When you're travelling abroad and the ATM or card swipe machine asks which currency you want to pay in always choose to be charged in the local currency of the country you're in, not INR!
- In the US, pick USD
- In the Eurozone, pay in euros
- In Sweden, choose the Swedish krona
- In Britain, select pounds
- In Australia, go for AUD
Don’t let the machine do your currency conversion!
Why choose the local currency?
Foreign ATMs and card machines might offer to convert the amount to your home currency (INR). It sounds convenient, but it’s a hidden-fee trap called Dynamic Currency Conversion (DCC).
DCC means you’re letting a foreign ATM or bank set an exchange rate — often much higher than what your bank offers. To avoid these unnecessary fees and get the best rates, always opt for the local currency.
Enjoy hassle-free travel with your Niyo SBM international debit card!
What is TCS?
TCS (Tax Collected at Source) is a way for the government to collect taxes upfront on certain transactions, including international spends. This amount is collected by the bank on behalf of the government when you spend more than a certain amount in international transactions.
The good news is: You can claim the TCS amount as a tax credit when you file your income tax returns (ITR).
With the recent changes in tax rules, from 1st April 2025, there is NO TCS on international transactions up to ₹10 lakh per financial year (FY). For international spends above ₹10 lakh in an FY, you can easily claim a TCS refund while filing your ITR.
TCS (Tax Collected at Source) in an FY
(w.e.f. 1st April 2025)
| Purpose | TCS Limit | TCS Rate |
|---|---|---|
| Education (financed by a loan) | NA | Nil |
| Medical treatment/education (not financed by a loan) | Above ₹10 lakh | 5% |
| Other purposes | Above ₹10 lakh | 20% |
| Purchase of overseas tour package | Up to ₹10 lakh | 5% |
| Above ₹10 lakh | 20% |
Notes
- Your total international spends made across all your debit cards, remittances, etc. against your PAN are considered when calculating the ₹10 lakh limit for zero TCS.
- The applicable TCS, based on the purpose of payment, will be levied in real-time at the moment of the transaction, starting 1st April 2025.
- Please ensure your account has sufficient funds, including taxes and charges, to avoid transaction failures.
Key highlights
- Zero forex markup & Zero TCS saves you big on all your international spends with Niyo.
- Niyo does not collect, charge, or impose TCS.
- Our promise of zero forex markup remains true for international transactions.
- For more details about handling TCS, please refer to SBM Bank’s official communication sent to your registered email ID.
How to claim a TCS refund
To claim a TCS refund, you need to file your income tax return (ITR). The Income Tax Department will then process your refund claim and credit your account.
Steps to claim a TCS refund
- Gather all the necessary documents, including Form 26AS, if applicable.
- Fill up the Refund Claim Form.
- Attach all the essential documents with the form.
- Submit the form to the Income Tax Department.
- The department will process it and credit the refund to your bank account.
You can download the Refund Claim Form from the Income Tax Department’s official website.