NRI Children Studying Abroad -- TCS on Education Remittance, Loans & Tax Guide (2026)

By CA Mayank Wadhera (CA|CS|CMA|IBBI Registered Valuer) MKW Advisors | Legal Suvidha | DigiComply

Last Updated: March 2026 | Applicable for FY 2025-26 (AY 2026-27)

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Every year, more than 1.3 million Indian students leave for universities in the United States, United Kingdom, Canada, Australia, Germany, and other countries. For most Indian families, funding education abroad is the single largest financial commitment they will ever make -- often exceeding the cost of a home. And with tuition fees ranging from Rs 15 lakh to Rs 80 lakh per year depending on the country and university, the tax implications of sending money abroad are not something families can afford to ignore.

Budget 2026 brought significant relief by cutting the TCS rate on education remittances. But most families -- and even many chartered accountants -- still do not fully understand the interplay between LRS limits, TCS rates, education loans, NRE account transfers, and how to actually recover the TCS paid.

This guide covers everything an Indian parent or NRI family needs to know about the tax treatment of education remittances for FY 2025-26. No jargon. No filler. Just actionable, structured guidance from a practicing Chartered Accountant who handles these cases daily.

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Table of Contents

1. What Is LRS and Why Does It Matter for Education?
2. TCS on Education Remittance -- The Current Law
3. Budget 2026 Relief -- TCS Cut to 2% for Education
4. Education Loan Funded Remittance -- The 0.5% Rate
5. TCS Threshold -- The Rs 7 Lakh Aggregate Rule
6. How to Claim TCS Back -- Deduction from Tax Liability or ITR Refund
7. Section 80E -- Education Loan Interest Deduction
8. Which Education Expenses Qualify Under LRS?
9. Scholarships and Tax-Free Treatment Under Section 10(16)
10. Parent Sending Money vs Student Earning Abroad
11. NRI Parent Sending from NRE Account -- No TCS
12. The Loophole -- NRE Account Remittance vs Resident LRS
13. Practical Example -- Parent Sending Rs 25 Lakh for US University
14. Form 15CA/15CB -- Not Required for Education Under LRS
15. Common Mistakes Families Make
16. FAQs -- 12 Most Common Questions Answered
17. Need Professional Help?

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What Is LRS and Why Does It Matter for Education? {#what-is-lrs-and-why-does-it-matter-for-education}

The Liberalised Remittance Scheme (LRS) is an RBI framework under FEMA that allows every resident individual in India to remit up to USD 2,50,000 per financial year (approximately Rs 2.12 crore at current exchange rates) outside India for permissible purposes. Education abroad is one of the explicitly permitted purposes.

Key points about LRS for education:

• The USD 2,50,000 limit is per person, per financial year (April to March).
• It is an aggregate limit covering all LRS purposes -- education, travel, medical, investments, gifts, and maintenance of relatives abroad.
• The remittance must be made through an Authorized Dealer (AD) bank -- your regular bank's forex desk.
• The bank is required to collect TCS (Tax Collected at Source) on behalf of the government at the time of remittance.
• Both the student and the parent (whoever is remitting) are counted separately. Each gets their own USD 2,50,000 limit.

For most families sending a child to study abroad, the LRS limit is more than sufficient. A four-year undergraduate degree at a US university costing USD 60,000 per year totals USD 2,40,000 -- within a single person's four-year cumulative capacity, though it may require drawing from both parents' limits in a single year.

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TCS on Education Remittance -- The Current Law {#tcs-on-education-remittance-the-current-law}

Section 206C(1G) of the Income Tax Act governs TCS on foreign remittances under LRS. The TCS rates for education remittances for FY 2025-26 are structured as follows:

The contrast is stark. If you send Rs 25 lakh abroad for education funded from savings, you pay 2% TCS on Rs 18 lakh (the amount exceeding Rs 7 lakh) = Rs 36,000. But if you send the same Rs 25 lakh for buying foreign stocks, you pay 20% TCS on Rs 18 lakh = Rs 3,60,000. The government clearly incentivizes education over speculative foreign investment.

Important: TCS is not an additional tax. It is a prepayment of your income tax liability. You get full credit for it when filing your ITR. Think of it as a forced advance tax deposit, not a penalty.

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Budget 2026 Relief -- TCS Cut to 2% for Education {#budget-2026-relief-tcs-cut-to-2-percent-for-education}

Prior to the recent budget changes, the TCS rate on education remittances (self-funded, above Rs 7 lakh) was 5%. The government recognized that this was placing an unnecessary cash flow burden on middle-class families already stretching their finances for a child's education abroad.

What changed:

• TCS rate on education remittances (own funds): Reduced from 5% to 2%
• TCS rate on medical treatment remittances: Reduced from 5% to 2%
• TCS rate on education loan funded remittances: Remains at 0.5% (already low)
• The Rs 7 lakh threshold below which no TCS applies: Unchanged
• TCS rate on other LRS remittances (travel, investment, gifts): Remains at 20%

The practical impact is significant. For a parent sending Rs 50 lakh in a year for a child's education at a US or UK university:

• Old rate (5%): TCS = 5% of Rs 43 lakh (50L minus 7L threshold) = Rs 2,15,000
• New rate (2%): TCS = 2% of Rs 43 lakh = Rs 86,000
• Savings: Rs 1,29,000 in upfront cash flow

For families already managing tight budgets with foreign exchange fluctuations, this Rs 1.29 lakh staying in the bank account instead of being locked up with the government until the ITR refund cycle is meaningful relief.

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Education Loan Funded Remittance -- The 0.5% Rate {#education-loan-funded-remittance-the-05-rate}

If the education remittance is funded through an education loan taken from a financial institution specified under Section 80E, the TCS rate drops to just 0.5% on the amount exceeding Rs 7 lakh.

How this works in practice:

1. You take an education loan from a bank or recognized financial institution.
2. The loan disbursement is made directly as a foreign remittance to the university or to the student's account abroad.
3. The bank collecting TCS verifies that the source of funds is an education loan.
4. TCS is collected at 0.5% instead of 2%.

Example: Parent takes a Rs 30 lakh education loan. The bank remits Rs 30 lakh abroad for university fees.

• TCS = 0.5% of Rs 23 lakh (30L minus 7L) = Rs 11,500
• Compare this to self-funded TCS: 2% of Rs 23 lakh = Rs 46,000

Critical condition: The lower 0.5% rate applies only when the remittance is sourced from a loan taken from a financial institution as defined under Section 80E. Personal loans, loans from relatives, or credit card payments do not qualify for the 0.5% rate.

Documentation required:

• Loan sanction letter from the bank/financial institution
• Loan disbursement proof showing the amount was used for the specific education remittance
• University admission letter and fee demand note

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TCS Threshold -- The Rs 7 Lakh Aggregate Rule {#tcs-threshold-the-rs-7-lakh-aggregate-rule}

This is where many families trip up. The Rs 7 lakh TCS-free threshold is not per remittance and not per purpose. It is an aggregate threshold across all LRS remittances in a financial year for each individual.

What this means:

If a parent has already remitted Rs 4 lakh under LRS for a foreign vacation in June 2025, and then remits Rs 20 lakh for the child's university fees in August 2025:

• Total LRS remittance: Rs 24 lakh
• Rs 7 lakh threshold already partially used (Rs 4 lakh for travel)
• Remaining threshold for education: Rs 3 lakh
• TCS on education remittance: 2% on Rs 17 lakh (20L minus 3L remaining threshold) = Rs 34,000

Planning tip: If you know you will need to send a large sum for education, avoid using your LRS limit for other purposes earlier in the financial year. Let the education remittance consume the Rs 7 lakh threshold first, as it attracts the lowest TCS rate anyway. Any subsequent LRS remittance for travel or investment will attract 20% TCS regardless.

Per-person calculation: Each family member has their own Rs 7 lakh threshold. If both parents remit, each gets Rs 7 lakh TCS-free. So a family can effectively remit Rs 14 lakh without any TCS if split between two people.

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How to Claim TCS Back -- Deduction from Tax Liability or ITR Refund {#how-to-claim-tcs-back}

TCS collected on your education remittance is fully adjustable against your total income tax liability. There are two ways to recover it:

Method 1: Adjust Against Tax Liability in the Same Year

If you have an income tax liability for FY 2025-26, the TCS paid during the year is automatically reflected in your Form 26AS and Annual Information Statement (AIS). When you file your ITR, you claim credit for this TCS just like you claim credit for TDS.

• TCS collected appears in Form 26AS under the TCS section.
• Enter it in the appropriate schedule of your ITR (Schedule TCS).
• It reduces your tax payable. If your total TCS and TDS exceed your tax liability, you get a refund.

Method 2: Claim Refund via ITR

If you have no tax liability (for example, your income is below the taxable threshold under the new regime, or you have sufficient deductions under the old regime), the entire TCS amount becomes refundable.

Timeline for refund: The income tax department typically processes ITR refunds within 30 to 60 days of e-verification. However, in some cases, it can take up to 120 days.

Important note for students: If the student is the remitter (using their own PAN for the remittance), the TCS credit goes to the student's PAN. The student must file an ITR in India to claim the refund, even if they have no Indian income. Many students and families miss this, resulting in unclaimed TCS amounts.

Pro tip: If the parent remits the money, the TCS credit is linked to the parent's PAN. The parent is more likely to have taxable income and can simply adjust the TCS against their tax liability without waiting for a refund.

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Section 80E -- Education Loan Interest Deduction {#section-80e-education-loan-interest-deduction}

This is one of the most generous deductions in the Indian tax code, and it is severely underutilized by families funding education abroad.

Key features of Section 80E:

Why this matters for education abroad:

Education loans for foreign universities are often in the range of Rs 30 lakh to Rs 1 crore. At an interest rate of 10-12%, the annual interest component alone can be Rs 3 lakh to Rs 12 lakh. Under Section 80E, this entire interest amount is deductible from your gross total income -- with no cap.

Example: A parent earning Rs 25 lakh per year takes an education loan of Rs 60 lakh at 11% interest. In the first full year of repayment, the interest component is approximately Rs 6.6 lakh. Under the old tax regime:

• Gross income: Rs 25,00,000
• Less Section 80E deduction: Rs 6,60,000
• Taxable income reduced to: Rs 18,40,000
• Tax saved (at 30% slab + cess): Approximately Rs 2,04,000

Over 8 years, this deduction can save lakhs in income tax. Critically, this benefit is only available under the old tax regime. Families need to do the math carefully to determine whether staying in the old regime for this deduction alone makes financial sense compared to the new regime's lower rates and standard deduction.

Who can claim:

• If the parent takes the loan, the parent claims 80E.
• If the student takes the loan, the student claims 80E (even if the parent is a co-borrower or guarantor).
• The deduction is available only to the individual who is legally obligated to repay the loan.

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Which Education Expenses Qualify Under LRS? {#which-education-expenses-qualify-under-lrs}

Not every payment related to a child's overseas education can be remitted under LRS. Here is a clear breakdown:

Qualified education expenses:

• University tuition fees
• Examination fees and registration charges
• Library and laboratory fees
• Hostel or on-campus accommodation fees charged by the university
• Mandatory health insurance required by the university
• Student activity fees, technology fees, and other mandatory university charges
• Caution deposits or security deposits required by the institution

Expenses that can be remitted under LRS but classified as "maintenance" (not education):

• Off-campus rent and living expenses
• Food and daily expenses
• Travel within the foreign country
• Personal health insurance beyond university requirements
• Books and supplies purchased independently

Why this classification matters: The TCS rate of 2% (or 0.5% for loan-funded) specifically applies to remittances for education. If money is sent for "maintenance of a relative abroad," it falls under the general LRS category and attracts 20% TCS above Rs 7 lakh. Banks may ask for documentation. Ensure you declare the purpose correctly and keep university fee receipts and demand letters handy.

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Scholarships and Tax-Free Treatment Under Section 10(16) {#scholarships-and-tax-free-treatment}

If your child receives a scholarship for studying abroad, the tax treatment in India is straightforward and beneficial.

Section 10(16) of the Income Tax Act provides a complete exemption for:

• Scholarships granted to meet the cost of education
• This includes tuition, fees, books, equipment, and living expenses covered by the scholarship

Key points:

• The scholarship amount is fully exempt from income tax in India -- no limit.
• This applies to scholarships from Indian or foreign institutions, government bodies, trusts, and private organizations.
• If the student is an Indian resident (which many are in the first year before becoming NRI by days count), this exemption shields the scholarship from Indian taxation.
• If the student has become a Non-Resident, their scholarship income (earned and received abroad) is not taxable in India anyway, so Section 10(16) becomes redundant but serves as a safety net.

Partial scholarships: If a student receives a partial scholarship covering 50% of tuition and the parent remits the remaining 50%, TCS applies only to the amount the parent remits (not the scholarship portion, which was never remitted under LRS).

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Parent Sending Money vs Student Earning Abroad {#parent-sending-money-vs-student-earning-abroad}

This is a critical distinction that affects tax treatment on both sides -- India and the foreign country.

Scenario 1: Resident Indian Parent Sends Money for Education

• Remittance falls under LRS.
• TCS applies at 2% (own funds) or 0.5% (education loan) above Rs 7 lakh.
• Money received by the student abroad is generally not taxable in the foreign country as it is a gift/support from family for education.
• The parent's LRS limit is consumed.
• Parent can claim Section 80E if the remittance is funded by an education loan.

Scenario 2: Student Earns Abroad (Part-Time Work, Assistantship, Stipend)

• No LRS or TCS implications -- the money is earned abroad, not remitted from India.
• The income is taxable in the foreign country under that country's tax laws.
• If the student is still a Resident of India (under the Income Tax Act's residential status rules), the income is also taxable in India as global income -- but DTAA relief is available to avoid double taxation.
• If the student has become an NRI (182+ days outside India in the relevant FY), foreign-earned income is not taxable in India.
• OPT/CPT income in the US, part-time work income in the UK or Canada -- all follow the same principle.

Planning insight: Once a student has been abroad for more than 182 days in a financial year, they typically become NRI for that year. From that point, any money they earn abroad is not taxable in India. However, money remitted by the parent from India still attracts TCS on the parent's side.

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NRI Parent Sending from NRE Account -- No TCS {#nri-parent-sending-from-nre-account-no-tcs}

This is one of the most important planning points in this entire guide.

If a parent is an NRI and sends money abroad from their NRE (Non-Resident External) account, TCS under Section 206C(1G) does not apply.

Here is why: TCS under Section 206C(1G) is triggered only on remittances made under the Liberalised Remittance Scheme (LRS). LRS is a facility available exclusively to resident individuals. An NRI's transfer from an NRE account is not a remittance under LRS -- it is a repatriation of funds that were already in foreign currency or earned outside India. The NRE account itself holds funds that are freely repatriable.

Practical implication:

• NRI parent with an NRE account in India can transfer money abroad for a child's education -- zero TCS.
• No Rs 7 lakh threshold to worry about.
• No 2% or 0.5% TCS calculation.
• The transfer is a simple NRE repatriation, not an LRS transaction.

What about NRO accounts? Transfers from an NRO (Non-Resident Ordinary) account are subject to different rules. NRO repatriation is allowed up to USD 1 million per financial year (after payment of applicable taxes on the income that generated those funds). This is also not LRS and therefore not subject to TCS under Section 206C(1G). However, Form 15CA/15CB may be required for NRO repatriation, and the income in the NRO account is subject to Indian tax before repatriation.

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The Loophole -- NRE Account Remittance vs Resident LRS {#the-loophole-nre-account-remittance-vs-resident-lrs}

Let us be direct about the tax planning opportunity here, because it is entirely legal and widely used.

The structure:

1. Parent is an NRI working abroad (say in the UAE, Singapore, or the US).
2. Parent earns in foreign currency and deposits into their NRE account in India.
3. Parent transfers from NRE account to the child's university abroad.
4. Result: No TCS. No LRS limit. No Form 15CA/15CB. No 2% or 0.5% deduction at source.

Compare this to the resident parent scenario:

1. Parent is a salaried professional in India.
2. Parent walks into the bank's forex desk and requests an LRS remittance for child's education.
3. Bank collects 2% TCS on the amount exceeding Rs 7 lakh.
4. Parent has to wait until ITR filing to claim TCS credit or refund.

The planning angle for families with one NRI parent:

In many Indian families, one parent works abroad while the other stays in India. If the NRI parent routes the education payment through their NRE account, the family saves the entire TCS outflow. If the resident parent sends the money, TCS applies.

This is not tax evasion. The NRE route is explicitly designed for NRIs, and the absence of TCS on NRE repatriation is a feature of the law, not a loophole being exploited. The RBI and CBDT have consistently maintained that LRS (and therefore TCS under Section 206C(1G)) applies only to resident individuals.

Caution: If an NRI parent deliberately parks money in an NRE account just to route an education payment and avoid TCS, while the actual source of funds is the resident parent (who transferred money to the NRI), this could be challenged as a colorable device. The substance-over-form principle applies. Keep documentation clean and ensure the NRE funds are genuinely the NRI parent's own earnings.

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Practical Example -- Parent Sending Rs 25 Lakh for US University {#practical-example}

Let us work through a complete, realistic example.

Facts:

• Mr. Sharma (resident Indian, IT professional in Bangalore) is sending his daughter to the University of Michigan for a Master's program.
• Annual tuition + mandatory university fees: USD 28,000 (approximately Rs 23.8 lakh)
• He also wants to send Rs 4 lakh for initial settling-in expenses (rent deposit, essentials)
• Total remittance: Rs 27.8 lakh (let us round to Rs 28 lakh for simplicity)
• Rs 15 lakh is from an education loan from SBI, Rs 13 lakh from savings
• No other LRS remittance made by Mr. Sharma in FY 2025-26

TCS Computation:

Step 1: Total remittance under LRS = Rs 28,00,000

Step 2: TCS-free threshold = Rs 7,00,000

Step 3: Taxable remittance = Rs 28,00,000 - Rs 7,00,000 = Rs 21,00,000

Step 4: Split between loan-funded and self-funded (proportional allocation):

• Loan-funded portion of taxable amount: Rs 15L / Rs 28L x Rs 21L = Rs 11,25,000
• Self-funded portion of taxable amount: Rs 13L / Rs 28L x Rs 21L = Rs 9,75,000

Step 5: TCS calculation:

• On loan-funded portion: 0.5% of Rs 11,25,000 = Rs 5,625
• On self-funded portion: 2% of Rs 9,75,000 = Rs 19,500
• Total TCS: Rs 25,125

Step 6: Mr. Sharma's annual income is Rs 22 lakh. His total tax liability (old regime, after deductions including 80E) is approximately Rs 3.5 lakh. The TCS of Rs 25,125 will be adjusted against this liability when he files his ITR for AY 2026-27. His effective tax payable reduces by Rs 25,125.

If Mr. Sharma had sent the entire Rs 28 lakh from savings (no education loan):

• TCS = 2% of Rs 21,00,000 = Rs 42,000
• By using the education loan route for Rs 15 lakh, he saved Rs 16,875 in upfront TCS outflow.

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Form 15CA/15CB -- Not Required for Education Under LRS {#form-15ca-15cb-not-required}

This is a common source of confusion and unnecessary panic.

Rule 37BB of the Income Tax Rules specifies that Form 15CA and Form 15CB are not required for remittances made under the following categories:

• Remittances under LRS of RBI (for all permissible purposes, including education)
• Certain specified purpose codes listed in the rule

Education remittances under LRS fall squarely within the exempted category. You do not need:

• Form 15CA (online declaration by the remitter)
• Form 15CB (Chartered Accountant's certificate)

What the bank will ask for:

• PAN card copy of the remitter
• A2 form (Application for Remittance Abroad)
• Purpose of remittance declaration
• University admission letter / I-20 / CAS (depending on the country)
• Fee demand letter or invoice from the university
• Education loan sanction letter (if claiming the 0.5% TCS rate)
• KYC documents if not already updated

Do not let the bank insist on 15CA/15CB for education LRS remittances. Some bank branches, particularly smaller ones, incorrectly demand these forms. Cite Rule 37BB and the specific exemption for LRS remittances. If the branch persists, escalate to the bank's central forex desk.

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Common Mistakes Families Make {#common-mistakes-families-make}

Having handled hundreds of education remittance cases, here are the errors we see repeatedly:

1. Not filing ITR to claim TCS refund. If the parent or student has no other reason to file an ITR, they often skip filing entirely -- and forfeit the TCS amount. Always file an ITR if TCS has been collected against your PAN.

2. Using the wrong purpose code at the bank. If you mark the remittance as "gift" or "maintenance" instead of "education," the bank may apply the 20% TCS rate for general LRS purposes. Be precise with the purpose code (S1107 for education).

3. Not keeping the university fee receipt. The bank needs documentation to apply the lower education TCS rate. Without a fee demand letter, they may default to the higher rate.

4. Ignoring the Rs 7 lakh aggregate threshold. Families who have already used LRS for travel or investment earlier in the year forget that the threshold is shared. They are surprised when TCS is collected from the first rupee of the education remittance.

5. Both parents remitting without coordination. If both parents remit separately, each gets their own Rs 7 lakh threshold. But if only one parent remits everything, only one threshold is used. Smart planning can save Rs 14,000 to Rs 28,000 in TCS.

6. Not claiming Section 80E deduction. Many parents take education loans and repay them for years without ever claiming the interest deduction. This is pure money left on the table.

7. Filing under new regime while having education loan. Section 80E is available only under the old regime. Parents who default to the new regime lose this deduction entirely.

8. NRI parent sending from NRO instead of NRE. NRO repatriation may involve tax deduction at source on the underlying income. NRE is cleaner and TCS-free.

9. Sending multiple small remittances thinking TCS applies per transaction. TCS is on cumulative LRS remittance in the financial year, not per transaction. Ten remittances of Rs 3 lakh each will attract TCS on Rs 23 lakh (30L minus 7L) in total.

10. Not checking Form 26AS for TCS credit. Sometimes the bank reports TCS under the wrong PAN. Verify Form 26AS before filing your ITR to ensure the credit is correctly reflected.

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FAQs -- 12 Most Common Questions Answered {#faqs}

FAQ 1: Is TCS applicable if I send less than Rs 7 lakh for education in a financial year?

No. If your total LRS remittances (for all purposes combined) in FY 2025-26 do not exceed Rs 7 lakh, no TCS is collected. This threshold is per individual.

FAQ 2: Can I get TCS refund if I have no tax liability?

Yes. File your ITR for the relevant assessment year, claim TCS credit in Schedule TCS, and the full TCS amount will be refunded to your bank account.

FAQ 3: My child got a scholarship of Rs 10 lakh and I am sending Rs 12 lakh for remaining fees. Is TCS on Rs 12 lakh or Rs 22 lakh?

TCS applies only to the amount you actually remit under LRS. If you remit Rs 12 lakh, TCS is on Rs 5 lakh (12L minus 7L threshold) at 2% = Rs 10,000. The scholarship paid directly by the foreign institution does not involve any LRS remittance from India.

FAQ 4: My daughter is in her second year and is now an NRI. Does TCS still apply when I send money?

Yes. TCS is on the remitter (you, the parent), not the recipient. If you are a resident Indian making an LRS remittance, TCS applies regardless of the recipient's residential status.

FAQ 5: Can I claim both Section 80E and Section 80C for the education loan?

Section 80E covers only the interest component of the education loan EMI. Section 80C covers life insurance, PPF, ELSS, etc. -- it does not cover education loan principal repayment. However, tuition fees paid for children (in India) are deductible under Section 80C up to the overall Rs 1.5 lakh limit. For foreign university fees, Section 80C deduction for tuition fees is generally not available.

FAQ 6: What if the education loan is from an NBFC, not a bank?

Section 80E requires the loan to be from a "financial institution" -- which includes banks and any institution notified by the government. Many NBFCs qualify, but verify with your CA. The 0.5% TCS rate similarly requires the loan to be from a qualifying financial institution.

FAQ 7: Is forex markup by the bank considered part of the remittance for TCS purposes?

No. TCS is calculated on the amount being remitted in Indian Rupees (converted at the applicable exchange rate). The bank's forex spread, service charges, GST on forex conversion, and wire transfer fees are not included in the TCS base amount.

FAQ 8: Can my child send money back to India from abroad without any tax?

If your child is an NRI, money sent to India (inward remittance) is not taxable in India as it is not income -- it is a transfer. However, if the money is a gift exceeding Rs 50,000 to a non-relative in India, gift tax provisions may apply for the recipient. For parents, gifts from children are exempt regardless of amount.

FAQ 9: My spouse and I both want to send money. Should we split the remittance?

Yes, this is a valid and recommended strategy. If you need to send Rs 20 lakh, each spouse can remit Rs 10 lakh. Each gets the Rs 7 lakh threshold, so TCS applies on Rs 3 lakh per person (instead of Rs 13 lakh for a single remitter). Total TCS saved: approximately Rs 20,000 (at 2%).

FAQ 10: Is TCS applicable on payment made directly to a foreign university via the university's payment portal (like Flywire, Western Union)?

Yes. If the payment originates from an Indian bank account and involves a foreign exchange conversion under LRS, TCS applies regardless of whether you use a direct bank wire, Flywire, WU, or any other payment intermediary. The Authorized Dealer processing the forex conversion is responsible for TCS collection.

FAQ 11: What happens if I do not have PAN? What TCS rate applies?

If the remitter does not have PAN or does not furnish it, TCS is collected at twice the applicable rate -- so 4% for education (self-funded) and 1% for education loan funded. This is under Section 206CC. Always provide PAN when making LRS remittances.

FAQ 12: Can I pay education fees in India for an abroad-university program (like a twinning program) without TCS?

If the payment is made in Indian Rupees to an Indian entity (such as the Indian partner institution), it is not a foreign remittance under LRS and TCS under Section 206C(1G) does not apply. However, if any portion is remitted abroad, that portion will attract TCS.

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Quick Reference: TCS Rate Card for Education Remittances (FY 2025-26) {#quick-reference}

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Need Professional Help? {#need-professional-help}

Sending a child abroad for education is both an emotional and financial milestone. Getting the tax compliance right -- from TCS optimization to Section 80E planning to residential status management -- can save your family lakhs over the education period.

CA Mayank Wadhera and the team at MKW Advisors specialize in NRI taxation, cross-border remittance planning, and education-related tax advisory. We handle everything from pre-departure tax planning to annual ITR filing for parents and students, TCS refund claims, DTAA treaty benefit applications, and FEMA compliance.

What we help with:

• TCS optimization and recovery planning for education remittances
• Section 80E deduction computation and old vs new regime analysis
• Residential status determination for students transitioning to NRI status
• DTAA benefit claims for students earning income abroad
• Form 15CA/15CB assistance for non-LRS remittances
• Complete ITR filing for parents and students abroad
• FEMA compliance and LRS documentation

Get in Touch

Book a consultation: Schedule a call with our team

WhatsApp: +91-96677 44073 -- Message us your query and we will respond within 24 hours.

Email: [email protected]

Website: Visit our client portal to upload documents and get started with your education remittance tax planning.

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Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws are subject to change, and individual circumstances vary. Please consult a qualified Chartered Accountant or tax professional before making financial decisions. The rates and thresholds mentioned are applicable for FY 2025-26 (AY 2026-27) as of the date of publication.

Published by MKW Advisors | Legal Suvidha | DigiComply -- Trusted NRI Tax Advisory Since Day One.