Under the Liberalised Remittance Scheme (LRS), the Union Government of India increased TCS on foreign remittances from 5% to 20%. However, no TCS will be levied on foreign remittances below INR 7 lakh for study-abroad needs. These new rates were declared in the Union Budget 2023 and will kick start from the 1st of July 2023.
With no TCS on annual international remittances for study abroad and foreign medical expenditures, parents of international students can breathe a sigh of relief. This relief is for overseas remittances made through study abroad loans. Further, for education loans above INR 7 lakh in a financial year, the Indian government will apply a TCS of only 0.5%. Moreover, for self-finance study abroad students, money transferred to universities will attract TCS at 5% for amounts exceeding INR 7 lakh in a financial year.
Additionally, if the kin of a study abroad student is sending money less than INR 7 lakh a year, the funds will not attract any TCS. Moreover, for overseas transactions above INR 7 lakh in a financial year, the funds will attract TCS at 5%.
Tips to Send Money Internationally Without 20% TCS
If the amount of money sent abroad for studying exceeds Rs 7 lakh a year per student, a TCS will be applied. In such cases, if the student requires an amount that surpasses the Rs 7 lakh threshold, parents have the option to divide the payments. Thereafter, parents can transfer the funds through their immediate family members. Therefore, with this each transfer will be below Rs 7 lakh, allowing the student’s overseas education expenses to be covered.
Tips to Make International Money Transfers from India to Study Abroad
Furthermore, one must consider the following tips when making international money transfers from India to study abroad:
- Research and Compare Transfer Options
- Understand Exchange Rates
- Choose a Reliable Service Provider
- Provide Accurate Beneficiary Details
- Confirm Transfer Fees and Charges
- Plan for Processing Time
- Keep Records and Documentation
- Consider Safety and Security
- Consult with Financial Advisor
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