Paying Canadian Tuition from India: LRS, TCS, Loans

Key takeaways

Tuition is sent under LRS by a resident with a PAN, using Form A2 at an Indian bank
TCS: nil on a loan from a financial institution; 2% above ₹10 lakh a year from other funds
Banks may allow more than USD 250,000 for studies, based on the school's cost estimate
Pay the school's exact account or its official payment partner, with the student ID in the reference
Keep the school's receipt: you may need it for your study permit, and for your records

How tuition payments from India work

Under India's Foreign Exchange Management Act (FEMA), a resident of India sends money abroad through an authorised dealer bank. For tuition, this happens under the Reserve Bank of India's (RBI) Liberalised Remittance Scheme. "Studies abroad" is a listed purpose.

The person sending (often a parent) must be resident in India and give their Permanent Account Number (PAN). RBI says PAN is mandatory for LRS.
They fill in Form A2, the application and declaration for buying foreign exchange. It states the purpose.
Each person can send up to USD 250,000 per financial year (April to March). The RBI master direction lets banks allow more for studies abroad, based on the estimate from the institution abroad.

The general steps for paying any Canadian school, wherever you are, are in how to pay tuition from abroad. This page covers what is specific to India.

How much TCS will you pay?

TCS is collected by the bank on top of the remittance. It is an advance of income tax, not a fee. As of October 2026, section 394 of the Income-tax Act, 2025 sets these rates for education:

How the tuition is funded	TCS
Loan from a financial institution (as defined in section 129(3)(b) of the Act)	Nil
Own savings, family money, or a loan from a lender that is not a financial institution	Nil up to ₹10 lakh in the financial year, then 2% on the amount above

₹10 lakh is 1,000,000 rupees. The 2% rate replaced 5% from April 1, 2026. See what changed in TCS after Budget 2026.

The ₹10 lakh counts all the sender's LRS spending in the year, including forex cards and international card spending. RBL Bank says it adds all of these together across its products.

The education loan route

If tuition is paid out of an education loan from a financial institution, the bank collects no TCS on it. To use this route:

Get the loan sanction letter. Check with the lender that it counts as a financial institution for this rule. RBL Bank notes that loans from non-specified lenders get 2% above ₹10 lakh.
Ask the lender to disburse directly to the Canadian school, or to send it as an LRS remittance for education. The bank needs to see that the money remitted is the loan.
Give the school's fee invoice or offer letter with the amount due.
Keep the remittance advice for your records.

Mixing loan money and savings in one account can make it hard for the bank to treat the payment as loan-funded. Ask the bank how it wants the payment set up.

Worked example: first-year tuition

Neha's offer letter shows first-year tuition that comes to ₹22 lakh. Her father pays from his savings. Earlier this financial year he loaded ₹3 lakh onto a forex card for a family trip.

His LRS total including the tuition: ₹3 lakh + ₹22 lakh = ₹25 lakh
Amount above ₹10 lakh: ₹15 lakh
TCS at 2%: ₹30,000, collected on top of the tuition

If ₹15 lakh of the tuition came from an education loan from a financial institution, that part would have nil TCS. RBL Bank, for example, says it leaves loan-funded education out of the ₹10 lakh count. Then the remaining ₹7 lakh from savings, plus the ₹3 lakh card load, totals exactly ₹10 lakh. TCS applies only above ₹10 lakh, so there would be no TCS. Ask your bank how it counts loan-funded payments.

Her father claims the ₹30,000 in his Indian income tax return. Work out your own figure with the India TCS calculator.

Ways to send the money

Route	How it works	Watch for
Bank wire to the school's account	Your Indian bank sends a SWIFT transfer using the school's bank details	Wire fees on both sides and the bank's exchange rate
School's payment partner	Many schools use Flywire, Convera or similar. You get a reference, then pay through an Indian bank	Use only the link on the school's own website
Education loan disbursement	The lender pays the school directly	Timing: allow time before your fee deadline

Each route still goes through an Indian bank under LRS. Compare cost and speed in tuition payment options compared.

Common mistakes

Wrong purpose code. Banks report every remittance with an RBI purpose code. On HDFC Bank's list, S0305 is "Travel for education (including fees, hostel expenses etc.)". Money for the student's own account or living costs may be coded differently, and may get 20% TCS above ₹10 lakh instead of 2%. Confirm the code with your bank before you send.
Beneficiary name mismatch. Use the school's legal name and account details exactly as on its official fee page. A small difference can delay the payment or send it back.
No student ID in the reference. Put the student's full name and student number in the payment reference, or the school may not match it.
Fake payment links. Scammers copy school portals and agents. Get bank details only from the school. Read tuition payment scams.
Not filing a return. The sender must file an Indian income tax return to get TCS back.

A timeline for your first payment

When	What to do
When you get your offer letter	Note the deposit and tuition amounts and the deadline. Find the payment page on the school's own website.
4 to 6 weeks before the deadline	Decide who sends the money and how it is funded. Apply for the education loan if you need one.
2 to 3 weeks before	Ask the bank for its forex checklist, the purpose code and the TCS it will collect. Send a small test payment if the school allows it.
At least 1 week before	Send the full payment with Form A2 and the fee letter. Keep the remittance advice.
After it arrives	Download the official receipt from the school. Ask the bank for the TCS certificate.

International wires can take several business days. Schools set their own deadlines, so check the date on your offer letter, not a general guide.

Receipts, study permits and later payments

Get an official receipt from the school once the money arrives. You may need it for your study permit application and at the border. IRCC asks students to show they can pay tuition and living costs; see study permit proof of funds.

For later years, the sender is usually still a resident of India, so the same LRS and TCS rules apply. A student living in Canada may also open a Canadian account to receive living costs. Ask your bank how it classifies those transfers before you set them up.

Common questions

Is there TCS on Canadian tuition paid from India?

Nil if paid from a loan from a financial institution. Otherwise nil up to ₹10 lakh of LRS spending in the financial year, and 2% on the amount above, as of October 2026.

Can my parents pay more than USD 250,000 for tuition?

The RBI LRS master direction lets banks allow remittances above USD 250,000 for studies abroad, based on the estimate from the institution abroad. Ask your bank what documents it needs.

What purpose code is used for tuition?

Banks report tuition with an RBI purpose code. On HDFC Bank's list, S0305 covers travel for education including fees and hostel expenses. Your bank decides the code, so confirm it before you send.

Who should send the money: the student or a parent?

Either, if they are resident in India and have a PAN. The LRS limit and the ₹10 lakh TCS threshold are per person, and TCS is credited to the sender's PAN.

Does paying through Flywire change the TCS?

No. The payment still leaves India through an Indian bank under LRS. TCS depends on how the payment is funded and its purpose, not on the payment partner.

Sources

Checked against these sources on October 10, 2026. Spotted something out of date? Tell us.

Paying Canadian tuition from India: LRS, TCS and the education loan route