FROM INDIA · CHAPTER 3
Sending money abroad:LRS, TCS and the best route.
Each resident Indian can send up to USD 250,000 a financial year abroad under the Liberalised Remittance Scheme. From 1 April 2026, education remittances funded by a loan from a specified financial institution carry no TCS; self-funded education remittances above ₹10 lakh a year carry 2% TCS. TCS is not a fee: it is tax collected in advance that the remitter adjusts against income tax or gets refunded.
Published by Althéa Consulting · Adviser: Harshita Kohli
Source review: · How to use our guides
- LRS limit
- USD 250,000
- Per person, per financial year
- TCS, loan-funded education
- Nil
- From a specified financial institution
- TCS, self-funded education
- 2% above ₹10 lakh
- FY 2026–27
- Other purposes
- 20% above ₹10 lakh
- e.g. investments, gifts
How TCS works on education remittances
| Source of money | Up to ₹10 lakh a year | Above ₹10 lakh a year |
|---|---|---|
| Education loan from a specified financial institution | Nil | Nil |
| Own or family funds, purpose: education | Nil | 2% on the amount above ₹10 lakh |
| Any LRS purpose, PAN not linked with Aadhaar (inoperative PAN) | Higher rate applies | Higher rate applies |
| Other purposes (investment, gift, maintenance not marked as education) | Nil | 20% on the amount above ₹10 lakh |
Paying your tuition fee step by step
- 01
Get the official invoice
Your offer, fee letter or invoice must show the university's bank details (IBAN/SWIFT, or ABA routing number in the USA) and your student ID.
- 02
Choose the remitter
The parent whose PAN is used is the remitter. Each parent has their own USD 250,000 limit and ₹10 lakh TCS threshold, so splitting large payments between them can reduce TCS.
- 03
Fill Form A2
Form A2 is the LRS application-cum-declaration. Your bank fills most of it; you choose the purpose code for education abroad (S0305) and attach the admission letter and invoice.
- 04
Send and keep the proof
Save the SWIFT copy (MT103) and the bank's advice. Universities and visa officers may ask for it.
- 05
Track TCS in Form 26AS / AIS
TCS appears against the remitter's PAN within weeks. It is credited when they file their income-tax return.
Wire, forex card or fintech?
| Route | Best for | Watch out for |
|---|---|---|
| Bank wire (SWIFT) from your Indian bank | Tuition and deposits | Exchange margin plus fees on both ends; correspondent bank charges can reduce the amount received |
| Online remittance platforms (partnered with an RBI-authorised bank) | Tuition and rent at better rates | Check the AD bank partner, the exact rate and that Form A2 and TCS are handled |
| Multi-currency forex card | First months' spending, travel | Loading fees, cross-currency charges, ATM fees abroad |
| University's own payment portal (e.g. Flywire, Convera) | Paying in INR to the university | Compare its rate with your bank's before paying |
| Cash | Arrival day only | RBI limits foreign currency notes to USD 3,000 per trip |
Before you remit
- Check the remitter's PAN is linked with Aadhaar (an inoperative PAN means a higher TCS rate)
- Ask the bank to mark the purpose as education, not gift or maintenance
- For loan disbursements, confirm the lender remits directly so TCS stays nil
- Compare the exchange rate quoted against the mid-market rate on the day
- Pay in the university's currency to avoid a second conversion
- Keep every invoice, A2 copy and SWIFT advice in one folder
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Claiming TCS back
TCS is credited to the remitter's PAN. When they file their income-tax return, it is set off against their tax liability for the year; if TCS exceeds the tax due, the balance is refunded.
Salaried parents need not wait: they can declare TCS to their employer (using the declaration form for TCS and other TDS) so the employer deducts less TDS from salary in the same year. Business owners can set TCS off against advance tax.
If the remitter has no taxable income, the full TCS is refunded after filing the return. File even if it is otherwise not required.
Once you are abroad
Under FEMA, a student going abroad for study is treated as a non-resident for exchange-control purposes, but can still receive money from family under LRS. Tell your Indian bank that you are studying abroad; it may redesignate your savings account as an NRO account.
For rent and living costs, parents can send money monthly to your foreign student account under the education purpose. Opening a local bank account in your first week (see your country's arrival chapter) makes this cheaper than repeated forex card loads.
QUICK ANSWERS
Your questions, answered.
None if the money is disbursed from an education loan by a specified financial institution. If self-funded, 2% on the amount above ₹10 lakh in the financial year, from 1 April 2026. It can be adjusted against income tax or refunded.
Per remitter (per PAN) across all LRS remittances in the financial year. Two parents remitting separately each have their own threshold.
The application and declaration your bank needs for any LRS remittance. It records the purpose (S0305 for education abroad), the remitter's PAN and the beneficiary's details.
Yes. Forex card loads are LRS remittances; marked as education, they follow the education TCS rules above.
The PAN becomes inoperative and TCS is collected at a higher rate. Link them on the income-tax e-filing portal well before you pay fees.
WHERE TO GO NEXT
Keep going: the pages that help next.
Each card says what you will find there. Looking for something else? See every page on the site.
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