Can I claim TCS as a refund?

Yes. TCS is reflected against your PAN in Form 26AS and pre-fills into your ITR as taxes already paid. If your total tax liability for the year is less than the TCS collected, the difference is refunded after the return is processed. If you have no tax liability at all (for example, a student remitting tuition who has no Indian income), the entire TCS amount can be claimed back as a refund. The cash-flow impact at the time of remittance is real — the bank does deduct it from your account — but the long-term cost is zero for anyone with low or no tax liability.

Why is TCS lower for education and medical?

Education and medical remittances were granted concessional rates because they are considered essential, non-discretionary outflows. Tuition for higher studies abroad and treatment for serious medical conditions cannot easily be deferred or split, so a flat 20% TCS would have created a real cash-flow burden for families. Under the current regime, the first ₹10 lakh of remittance is fully exempt regardless of purpose; above that, education funded from your own savings and medical treatment attract only 5%. Education funded by a loan from a financial institution (bank / NBFC notified for this purpose) is taxed even lower at 0.5% — the lowest TCS rate available — recognising that the borrower already faces interest costs on the loan principal.

Does TCS apply on every rupee I send abroad?

No. Under the post-Budget-2026 regime, the first ₹10 lakh of LRS remittances in a financial year is fully exempt from TCS — irrespective of purpose. TCS kicks in only on the amount above that ₹10 lakh cumulative threshold. The threshold is calculated per individual per financial year (April to March), aggregated across ALL remittance purposes — so if you've already sent ₹6 lakh for a tour package and now want to send ₹8 lakh for an investment, the cumulative is ₹14 lakh, the first ₹10 lakh is exempt, and TCS applies on the remaining ₹4 lakh at the rate applicable to your current purpose.

How is the ₹10 lakh threshold counted?

The ₹10 lakh threshold is cumulative, per individual, per financial year (1 April to 31 March), aggregated across every category of LRS remittance — education, medical, investment, tour, gift, and other purposes combined. It resets on 1 April every year. Because the threshold is shared, a high-rate remittance (e.g. an investment in foreign equities at 20%) and a low-rate remittance (e.g. tuition at 5%) draw from the same pool. The rate applied to each transaction depends on its own purpose, but the threshold itself is purpose-agnostic. The bank tracks your cumulative under-the-cap remittances and starts applying TCS on the very first rupee above ₹10 lakh.

TCS on Foreign Remittance Calculator

TCS Foreign Remittance

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Calculate Tax Collected at Source (TCS) on outbound foreign remittances under the Liberalised Remittance Scheme (LRS). Applies 20% TCS above the ₹10 lakh annual threshold, 2% for education/medical (post-Budget-2026), and 5% for education funded by loan.

Reviewed by the CalculatorKosh Editorial TeamUpdated June 2026Free · No sign-up

Remittance Details

Current remittance amount

₹

₹0₹1000 Cr

Amount you want to wire abroad now (in rupees, before TCS).

Prior FY remittances (all purposes)

₹

₹0₹1000 Cr

Sum of every LRS remittance you have already made between 1 April and today, across all purposes.

TCS Purpose

TCS Amount

(5% on ₹5,00,000 above the ₹10L threshold)

Cumulative Remittance

₹15.0 L

Threshold (per FY)

₹10.0 L

Total You Pay

₹15.3 L

Received Abroad

₹15.0 L

TCS Breakdown

Below threshold (₹10,00,000)No TCS

Above threshold (₹5,00,000)TCS @ 5% = ₹25,000

Total deducted from your account₹15,25,000

TCS is a credit, not a tax

The ₹25,000 TCS is collected by your bank and deposited to your PAN. Claim it as a tax credit when you file ITR — if you have no tax liability, you get a full refund. It's an upfront deduction, not a permanent cost.

Rate by Purpose

Education (via FI loan)0%

Education (own funds)5%

Medical treatment5%

Investment (MF / shares)20%

Tour package (overseas travel)20%

Gift / donation20%

Other purpose20%

Rates apply only on the amount above the ₹10 lakh annual threshold.

Plan Ahead

Splitting large investment remittances across two FYs (before/after 1 April) can reset the ₹10L threshold. For education, prefer FI-loan-funded remittances — only 0.5% TCS vs 5% from own funds.

Check your LRS limit usage

Use the LRS Limit Tracker to see how much of your INR 2,50,000 annual cap is still available across all purposes.

Remittance Composition

How It Works

This calculator applies the post-Budget-2026 TCS regime on outward foreign remittances under Section 206C(1G) of the Income Tax Act. It works out how much Tax Collected at Source your bank will levy on top of your remittance, the total cash that leaves your account, and the amount that actually reaches the foreign recipient — based on the remittance purpose, the current amount, and what you have already sent abroad this financial year.

How the ₹10 lakh threshold works

The first ₹10 lakh of LRS remittances in a financial year is fully exempt from TCS, regardless of purpose. This threshold is cumulative per individual per FY (April–March) and is shared across every remittance category — education, medical, investment, tour, gift, and other purposes all draw from the same pool. The threshold was raised from ₹7 lakh to ₹10 lakh in Union Budget 2026, effective FY 2026-27. TCS applies only on the portion above ₹10 lakh.

Rates by purpose

Education funded by an FI loan attracts the lowest rate — 0.5% — recognising that the borrower already pays interest on the loan principal. Education from own funds and medical treatment attract a concessional 5% because both are considered essential, non-discretionary outflows. Every other purpose — investment (foreign mutual funds / shares / property), tour packages, gifts, and any other use — attracts the full 20%.

TCS is a credit, not a tax

TCS is collected by the authorised dealer (your bank or forex provider) and deposited against your PAN. It pre-fills into your ITR as taxes already paid. If your final income-tax liability for the year is less than the TCS collected, the surplus is refunded. If you have no tax liability at all, the entire amount comes back. So the cash-flow impact on the day of remittance is real, but the long-term cost is zero for anyone whose tax liability is below the TCS collected.

Frequently Asked Questions

TCS (Tax Collected at Source) under Section 206C(1G) of the Income Tax Act is an upfront amount that authorised dealers — typically your bank or forex provider — collect from you at the time of remitting money outside the country under the Liberalised Remittance Scheme (LRS). It is NOT a separate tax. It is a prepayment of your income-tax liability that gets credited to your PAN. When you file your ITR you claim it as a tax credit; if your total tax liability is lower than the TCS collected (or zero), the surplus comes back as a refund. The rates and the ₹10 lakh annual threshold (raised from ₹7 lakh in Budget 2026) depend on the purpose of the remittance.