TCS on Foreign Education: Rate, exemption limit on remittance for study abroad from July 1

TCS on Foreign Education from July 1: There has been no change in the TCS rate for remittances for the purpose of foreign education/study abroad. According to a clarification issued by the Finance Ministry on May 18, the old TCS rate will continue to apply to remittances for study abroad from July 1. Following are the details of the TCS rate and exemption limit.

TCS rates on remittances for education from July 1:

1. If the amount being remitted out is a loan obtained from any financial institution as defined in Section 80E of the Income Tax Act: The TCS exemption limit is Rs 7 lakh and the TCS rate is 0.5%, according to the Finance Ministry.

This means, if you are making a remittance for studying abroad with the help of an education loan from a bank, no TCS will apply till Rs 7 lakh. For remittances above Rs 7 lakh, the TCS rate would be just 0.5% from July 1, 2023. The same rate and limit were applicable earlier as well.

2. If the remittance for studying abroad is not out of loan from a financial institution but self: The TCS exemption limit is Rs 7 lakh and the TCS rate is 5%, according to the Finance Ministry.

This means, if you are making a remittance for studying abroad without taking a loan from a bank, no TCS will apply till Rs 7 lakh. For remittances above Rs 7 lakh, the TCS rate would be 5% from July 1, 2023. The same rate and limit were applicable earlier as well.

Meanwhile, the Government has changed the TCS rate for remittances under the Liberalised Remittance Scheme (LRS) for the purpose of booking overseas tour packages and buying bonds, shares, real estate, gifts, etc. There is no change in the TCS rate for remittance for medical treatment.