Q. Consider the following statements::
1.International credit card transactions result in an inflow of foreign exchange to the home country.
2.The imposition of tax on international credit card transactions under the Liberalised Remittance Scheme (LRS) promotes financial transparency.
3.Imposing taxes on international credit card transactions adds an additional financial burden on card users.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Explanation –

Statement 1 is incorrect. International credit card transactions result in an outflow of foreign exchange from the home country.

Statement 2 and 3 are correct. The imposition of tax on international credit card transactions under the Liberalised Remittance Scheme (LRS) promotes financial transparency. Imposing taxes on international credit card transactions adds an additional financial burden on card users.

Source: ForumIAS