Is there any change in the tax implication on remittances for the purpose of overseas education?

For remittances done for the purpose of overseas education, 5% TCS will be applicable on the amount being remitted in excess of INR 7 Lacs. The same would 0.5% in the cases of the amount remitted originates via an education loan from a financial institution as defined under Section 80E of the Income Tax Act.

What is the TCS taxation rate and which transactions will be affected?

All forex purchases and remittances (other than for education, medical and business/ commercial purposes) over a threshold limit of Rs 7 lakhs in a financial year executed under the LRS will be liable to be deducted @20%, starting Oct 1, 2023. The TCS for education and medical treatment is still the same as the current i.e. 5% or 0.5% where the source of funds for the remittance is an education loan from an authorized financial institution). No TCS is applicable to business/ commercial transactions.

Amrita Pritam, Author at Blog-Best Foreign Exchange

Amrita Pritam

Amrita Pritam is the Head of PR and Marketing at BookMyForex and a fintech communications leader with over 15 years of experience. She closely tracks cross-border payments and regulatory developments impacting Indian travellers and students.

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