Paying University Fees Abroad: LRS Limits & TCS on Study Remittances
Last verified: June 2026, against RBI Liberalised Remittance Scheme / FEMA rules and the Budget 2025 TCS changes cited below. These rules change often and individual cases vary — confirm with your authorised dealer bank or a qualified advisor before acting. This is general information, not personal financial advice.
Sending your child — or yourself — to study abroad means moving large sums overseas for tuition and living costs. The good news for FY 2025-26: the tax-at-source rules on education remittances have eased considerably, and loan-funded education now attracts zero TCS. Here is how to pay foreign university fees correctly under the LRS.
Use the LRS — up to USD 250,000 a year
Education remittances go through the Liberalised Remittance Scheme, which allows up to USD 250,000 per student per financial year. This comfortably covers tuition plus living expenses for most courses. You remit through your bank (the authorised dealer), quoting PAN and the education purpose code, with the university’s fee invoice or admission letter as support.
TCS on study-abroad remittances (FY 2025-26)
| How the education is funded | TCS above ₹10 lakh |
|---|---|
| Through an education loan (from a notified financial institution) | Nil — TCS removed from 1 April 2025 |
| From own funds / savings | 5% |
Below ₹10 lakh in a financial year, no TCS applies either way. And remember: TCS is adjusted against your income tax and refunded if excess — it is not an additional cost.
Tuition vs living expenses
Both tuition paid directly to the institution and living expenses (rent, food, local travel) sent to the student count within the same USD 250,000 annual limit. Many families remit tuition directly to the university and a separate maintenance amount to the student’s overseas account.
The education-loan angle
Funding through an education loan now carries two benefits: zero TCS on the remittance, and a tax deduction on the interest under Section 80E (no upper limit, for up to 8 years). For many families this makes a loan-funded structure more tax-efficient than paying entirely from savings.
How to remit, step by step
- Get the university fee invoice / I-20 / admission letter and the bank’s LRS declaration (Form A2).
- Choose how to send — wire transfer or a forex facility from your bank.
- The bank applies TCS only if you cross ₹10 lakh in the year (nil if loan-funded).
- Keep all receipts for your ITR, where you reconcile TCS via your 26AS/AIS.
FAQs
Is there TCS on education fees sent abroad?
Nil if funded by an education loan; 5% on the amount above ₹10 lakh if paid from own funds. Below ₹10 lakh, no TCS.
How much can I send for study abroad?
Up to USD 250,000 per student per financial year under the LRS, covering tuition and living costs.
Can I claim the TCS back?
Yes. It is adjusted against your income-tax liability and refunded if in excess.
Does a loan reduce my tax beyond TCS?
Yes — interest on an education loan is deductible under Section 80E for up to 8 years with no upper limit.
