Foreign study made less tedious on TCS relief

Only applicable for remittances made by taking a loan

- JOYDEEP GHOSH

THE BUDGET HAS given a significant benefit to families who wish to send their children abroad for education by removing the tax collected at source (TCS) on remittances of up to ₹10 lakh.

However, it will only be applicable to remittances made by taking loans. Earlier, a TCS of 0.5% was applicable for amounts of over ₹7 lakh. If the foreign education is being funded by the family of the person from its own resources, the TCS will continue to be 5%.

The TCS will be levied on the amount over the threshold limit. For example, if you are sending ₹10 lakh earlier through the liberalised remittance scheme (IRS) route, the TCS was applicable on ₹3 lakh. Now, if the transferred amount is ₹12 lakh, it will be applicable on the additional ₹2 lakh.

Currently, remittances through the LRS route are capped at $250,000 per person in a year.