NEW DELHI (Reuters) - India will not impose a 20% tax on spending of up to 700,000 rupees ($8,559.55) through international debit and credit cards in a financial year, it said in a statement on Friday, partly reversing the rules within days after a public backlash.

The finance ministry earlier this week had announced a tax of 20% on the spending for overseas travel and purchases using international debit and credit cards from July 1.

A tax collected at source could be claimed by the payee at the time of filing of tax returns.

($1 = 81.7800 Indian rupees)

(Reporting by Nikunj Ohri and Nidhi Verma; Editing by Varun H K)