Remittance Trends Eased
According to the Reserve Bank of India (RBI) data, there was a shift in education-related outward remittances. Specifically, in November 2025, the remittances from
India for overseas education under the LRS saw a decline. They decreased to $120.94 million, which is a 25.92 percent drop from October. Furthermore, this was a significant decrease compared to September 2025, where the drop was 54.25 percent. The total outward remittances for education abroad reached about $2.92 billion in the fiscal year 2024-25. This shows a dynamic trend in the amount of money flowing out of India for educational purposes, reflecting both short-term fluctuations and the overall yearly figures.
TCS Changes Explained
The Union Budget 2026 brought about notable changes regarding the Tax Collected at Source (TCS) on outward remittances for education under the Liberalised Remittance Scheme (LRS). The budget reduced the TCS rate from 5 percent to 2 percent for education-related remittances exceeding Rs 10 lakh. This adjustment was announced by the Finance Minister during the budget speech, highlighting the government's aim to ease the financial strain on individuals. This move covers both self-funded overseas education and remittances for medical purposes. It is important to know that for education loans obtained from financial institutions, the TCS remains at zero percent. The reduction in TCS is seen as a timely measure aimed at improving liquidity and supporting students and families dealing with rising global costs. The goal is to balance the monitoring of cross-border fund flows with a more taxpayer-friendly approach.
Impact and Reactions
The reduction in TCS on remittances is expected to bring relief to those financing education abroad. Experts, such as Pavan Kavad from Prithvi Exchange, have stated that while the TCS rationalisation is a positive step, fully eliminating TCS on education loan borrowings would have offered greater benefits to students. Ankit Mehra from GyanDhan also acknowledged that the TCS adjustments would improve affordability at the point of payment and match the tax treatment with the long-term nature of educational investments. The change indicates a move towards making it easier for students to access funds for their education. These measures collectively showcase a government initiative to streamline the financial processes related to international education and healthcare, thus facilitating smoother transactions for individuals.
