Key takeaways
- No TCS on the first ₹10 lakh you send in a financial year (except tour packages)
- Above ₹10 lakh: 2% for education and medical, 20% for other purposes
- Education paid with a loan from a financial institution: nil TCS
- TCS is an advance of income tax that you can claim back in your Indian tax return
How TCS works on money sent abroad
When an Indian resident sends money abroad under the Liberalised Remittance Scheme (LRS), the bank must collect tax collected at source (TCS) on some remittances. As of October 2026, section 394 of the Income-tax Act, 2025, as amended by the Finance Act 2026, sets these rates for financial year 2026-27:
| Purpose | Up to ₹10 lakh a year | Above ₹10 lakh |
|---|---|---|
| Education with a loan from a financial institution | Nil | Nil |
| Education with your own money | Nil | 2% |
| Medical treatment | Nil | 2% |
| Other purposes | Nil | 20% |
| Overseas tour package | 2% | 2% |
Before April 1, 2026, education and medical were 5% above ₹10 lakh, and tour packages were 5% or 20%.
How the calculator counts
- It adds what you already sent this financial year (April to March) to the new amount.
- It finds the part of the new amount that is above ₹10 lakh in total. If you already passed ₹10 lakh, the whole new amount is above.
- It applies the rate for your purpose to that part. Tour packages are taxed from the first rupee.
- If you enter the rupee to US dollar rate, it also checks your total against the USD 250,000 LRS limit.
Banks count all your LRS spending with them (remittances, forex cards and card spending abroad) toward the ₹10 lakh, and ask you to declare remittances made through other banks. Your bank’s count is the one that applies, so ask it how much you have used.
Worked example
Arjun pays his first-year tuition of ₹15 lakh to a Canadian college from his own savings. He has sent nothing else this financial year.
- Threshold: the first ₹10 lakh has no TCS.
- Above the threshold: ₹15 lakh − ₹10 lakh = ₹5 lakh.
- TCS: 2% of ₹5 lakh = ₹10,000.
- His bank takes ₹15,10,000 from his account.
If his tuition came from an education loan, TCS would be nil. If the ₹15 lakh were a gift to set up his life in Canada, TCS would be 20% of ₹5 lakh = ₹1 lakh.
Common mistakes
- Forgetting forex card loads and card spending abroad. They count toward the ₹10 lakh threshold.
- Choosing the wrong purpose. Money for your own living costs after you move is not education unless it pays the school; banks treat it as another purpose at 20% above ₹10 lakh.
- Not filing an Indian tax return after leaving. You need to file to get excess TCS back.
Next steps
- Claim your TCS: it appears in Form 26AS under your PAN. Claim it in your Indian income tax return for that year.
- Plan the timing: the ₹10 lakh threshold resets every April 1. Large amounts can sometimes be split across two financial years, or across family members who each have their own limit.
- Read the full guide: how to bring money from India to Canada.
- Paying tuition? See how to pay tuition from abroad.