Study Abroad: New TCS Rates from July 2023 for Foreign Remittances

Know About the Best Banks in India for Inward Remittance

Starting 1st of July 2023, Indian students will have to pay 20% Tax Collection at Source (TCS) for outward remittances under the Liberalised Remittance Scheme (LRS). Under the LRS of the government of India, the new TCS will apply to overseas funds transfers, foreign trips, overseas investments, and all other foreign transactions.

However, study abroad education loans and medical expenses in foreign lands will not be included in the new scheme. Under LRS, money remitted for both these essential services will attract only 0.5% TCS. This percentage will be applied to funds transferred beyond INR 7 lakh. 

Furthermore, the 2023 Budget also stated that 5% TCS will be levied on the living expenses of study abroad Indian students. Parents must show proof of education expenses of their wards before making an overseas transfer to avoid paying 20% TCS. 

Another clause of the new Liberalised Remittance Scheme is that there is no Tax Collection at Source on outward remittances below INR 7 lakh. 

Study Abroad: New TCS Rates from July 2023 for Foreign Remittances
Source: Taxman and Business Insider India

Ways to Send Money Abroad under LRS

Parents of study abroad students can follow these steps to make international money transfers under LRS:

  • Visit the bank
  • Fill up the A-2 Form
  • Mention the purpose of outward transfer
  • Attest the Declaration Form

It is essential that parents provide sufficient information to establish that their child is pursuing higher education abroad. This will provide a hefty TCS exemption of 15% on foreign remittances. 

Other Transactions Under LRS

The Government of India’s Liberalised Remittance Scheme also includes the following transfers:

For the latest updates about international money transfers, stay in tune with Fly Finance News Desk

About Fly Finance News Desk

Leave a Comment

ICICI Bank Education Loan to Study Abroad Baroda Yoddha Education Loan to Study Abroad Top 5 Benefits of SBI Zero Balance Account for Students Eligibility Criteria for Aditya Birla Capital Education Loan to Study Abroad Auxilo Education Loan for Wards of Defence Personnel Steps Involved In Canara Bank Education Loan Processing Time IBDI Education Loan Documents Required Checklist Education Loan Interest Rate Comparisons: Banks vs. NBFCs Indian Army Education Loan to Study Abroad: Know It All Here Process and Ways to Obtain Gap Certificate for Education Loan

Send Money Abroad in <15 mins


Request a callback


Get an education loan at the lowest interest rate


Thank you! Your call request has been submitted

Our team will connect with your shortly

aero Confused which education loan is the best for you?