No investment can get you a higher return than the one on your education. Adding to the purely economic reasons to go for an abroad education loan are the new TCS rules introduced by the Government of India. Union Budget 2020 has brought a new rule according to which a 5% Tax Collection at Source (TCS), under LRS, is applicable to the forex remittances of INR 7 lakh or more in a financial year. This new rule on foreign exchange transactions is applicable from 01 October 2020. Authorized dealers such as banks and remittance companies will collect the 5% TCS once the foreign remittance made by a person crosses INR 7 lakh in a financial year. The TCS applicable to educational expenses arranged through an abroad education loan is only 0.5%. Therefore, students taking an education loan to finance the abroad studies will have a notable saving on the tax amount. Let us traverse through the details of the new remittance rules and also understand how will these changes affect the students.
This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/new-tcs-rules-abroad-education-loans