Important Update: New TCS Rules on Foreign Remittances Effective April 1, 2025 – Ahalia Finforex Simplifies the Process for You
Are you planning to send money abroad for education, travel, medical expenses, or investments? Then you need to be aware of the latest changes in Tax Collected at Source (TCS) regulations that will come into effect starting April 1, 2025. These changes were introduced in the Union Budget 2025, and they directly impact how much tax is collected on international money transfers under the Liberalised Remittance Scheme (LRS).
What Are the New TCS Rules on Foreign Remittances?
As per the Union Budget 2025, here are the two key updates regarding TCS on foreign remittances:
✅ 1. TCS Threshold Increased
The TCS threshold has been raised from ₹7 lakh to ₹10 lakh annually. This means that if you’re sending money abroad under LRS, you will now not be charged TCS on the first ₹10 lakh you remit in a financial year. Earlier, this threshold was limited to ₹7 lakh, making it more likely for moderate transactions to attract tax.
✅ 2. Education Remittances Funded by Loans Are TCS-Exempt
If you're sending money abroad for education and the payment is being made through an education loan from a financial institution, you will now be exempted from TCS. This is a huge relief for thousands of Indian students and their families, as the cost of higher education abroad continues to rise.
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