Moment guide · FY 2026-27

I am remitting money under the Liberalised Remittance Scheme

What TCS applies to LRS remittances for travel and education?

Under the LRS, TCS under section 206C(1G) applies at 20% on tour packages above ₹7 lakh and other remittances above ₹10 lakh, while education via a bank loan is NIL, own-fund education above ₹7 lakh is 0.5%, and medical treatment above ₹7 lakh is 5%. The TCS is an advance tax credit claimable in your ITR, and the LRS limit for residents is USD 250,000 a year.

The #1 trap

Thinking TCS is a cost — TCS collected under section 206C(1G) is an advance against your tax and is claimed as a credit in your ITR. The other miss: the LRS limit of USD 250,000 a year is for residents, and education remittances funded by a bank loan attract NIL TCS, while own-fund education above ₹7 lakh attracts only 0.5%.

Rohan, remitting for travel and his son's education

Rohan buys an overseas tour package for ₹9,00,000 to Europe. Under section 206C(1G), the TCS on tour packages is 5% up to ₹7,00,000 and 20% above it. The TCS is 5% of ₹7,00,000, which is ₹35,000, plus 20% of ₹2,00,000, which is ₹40,000, giving total TCS of ₹75,000, which the travel agent collects. Separately, Rohan remits ₹15,00,000 for his son's tuition at a US university. Because the education remittance is funded through an education loan from a scheduled bank, the TCS is NIL — the bank provides a loan statement and the university invoice to the remitting bank, and no TCS is charged. His daughter's medical treatment abroad costs ₹9,00,000, and the TCS on medical remittances is 5% on the amount above ₹7,00,000, which is 5% of ₹2,00,000, equal to ₹10,000. If Rohan had instead remitted ₹12,00,000 for a foreign investment, the TCS would be 20% on the amount above ₹10,00,000, which is 20% of ₹2,00,000, equal to ₹40,000. All the TCS amounts are reported in his Form 26AS, and he claims them as credits against his total tax in his ITR, so the ₹75,000, ₹10,000 and ₹40,000 reduce his final liability. The LRS limit for residents is USD 250,000 per financial year, so Rohan's total remittances stay within the cap. A quick call with us dials in the final figure. Rohan also checks whether the remittance is within the USD 250,000 LRS limit for residents, because an overseas investment or gift remittance above that cap needs RBI approval, and the TCS rules still apply within the approved amount. The TCS under section 206C(1G) is collected by the authorised dealer or the tour operator, and each collector reports the TCS in Form 26AS, so Rohan reconciles the amounts against his return. If he makes multiple LRS remittances in a year, the ₹7 lakh and ₹10 lakh thresholds are tested on the aggregate for each category, not per transaction, so a second remittance can trigger the higher slab. The education TCS of 0.5% applies to the amount above ₹7 lakh when the funds come from his own savings, and the bank requires the university invoice and the loan sanction letter to apply the NIL or lower rate. If the TCS exceeds his final tax, he claims the excess as a refund at filing. A quick call with us dials in the final figure.