All You Need To Know About TCS On International Money Transfers (2025 Edition)

What is TCS on International Money Transfers?

Every time you send money abroad from India—whether for education, medical needs, or a family gift—there’s a small tax built into the process, known as Tax Collected at Source (TCS). This isn’t something you pay separately; it’s collected by the bank or remittance service provider at the time of transaction.

Under RBI’s Liberalized Remittance Scheme (LRS), individuals in India can send up to USD 250,000 abroad each year. To monitor large transfers and ensure tax compliance, the government now applies TCS on these international remittances.

With the start of the new financial year on April 1, 2025, changes in the Union Budget have redefined how TCS on international money transfers works. In this guide, we break down the new rules, rates, and what it means for you if you’re planning to send money overseas for any reason—from tuition fees to investment.

What Changed in 2025? (Budget Update)

The Union Budget 2025 revised the TCS structure to increase the threshold for exemption and simplify the compliance framework for TCS on international money transfers:

• Threshold Increased: No TCS on remittances up to INR 10 lakh per financial year.

• Education Loans Exempt: Remittances funded through education loans from specified financial institutions are completely exempt, regardless of amount.

• Self-funded Education & Medical Expenses: Attract 5% TCS on the amount exceeding INR 10 lakh.

• Other Purposes (Investments, Gifts, Tour Packages, etc.): Attract 20% TCS on the amount exceeding INR 10 lakh.

Need to pay your university fees and living expenses abroad?

Make international money transfers easier than ever! Enjoy no paperwork, secure & swift transfers, and real-time tracking.

Pay Now

TCS Rate Table (Effective April 1, 2025)

Let’s Make This Practical: Examples

These real-life use cases explain how TCS on international money transfers is applied:

1. Education via Loan

A student remits INR 15 lakh via an approved education loan: TCS = 0%

2. Education (self-funded)

A remittance of INR 20 lakh for tuition fees without a loan: 5% of INR 10 lakh = INR 50,000 TCS

3. Medical Remittance

INR 12 lakh remitted for surgery: 5% of INR 2 lakh = INR 10,000 TCS

4. Investment in US Stocks

INR 25 lakh remitted for investments: 20% of INR 15 lakh = INR 3 lakh TCS

5. Foreign Tour Package

A holiday worth INR 8 lakh: 5% = INR 40,000 TCS

If it’s INR 15 lakh: 5% on 10L (₹50,000) + 20% on 5L (₹1L) = INR 1.5 lakh TCS

Visualizing the Process: TCS on International Money Transfers in Action

International Credit Card Payments – Exempt (For Now)

As of April 2025, international credit card spending is still outside the LRS and hence not subject to TCS on international money transfers. However, the government and RBI are exploring ways to bring them under the tax net in the future.

Can You Claim a TCS Refund?

Absolutely. If the TCS on international money transfers you pay is higher than your actual tax liability, you can claim it while filing your income tax return. Here’s how:

• Check TCS entries in Form 26AS or the AIS portal.

• Collect your Form 27D from the bank or remittance partner.

• File your ITR and adjust or claim the excess amount.

Learn about the Refund of TCS on International Remittance – What it is and how to get it!

Tips to Avoid or Reduce TCS Legally

Planning your financial transactions smartly can help reduce your liability under TCS on international money transfers:

• Use education loans from RBI-recognized financial institutions.

• Keep remittances within the INR 10 lakh limit per financial year.

• Distribute remittances across eligible family members.

• For eligible transactions, use credit cards instead of bank remittance (while this lasts).

Learn How to Avoid TCS on Foreign Remittances in 2025 – Legally & Smartly!

Why Use HOP Remit by moneyHOP for International Remittance?

When dealing with TCS on international money transfers, having the right partner matters. HOP Remit by moneyHOP is not just another remittance provider—it’s a full-stack digital platform built for transparency, efficiency, and affordability. Here’s how we stand out:

• Transparent charges – You see the full fee breakdown, including TCS.

• Lowest transfer fees – No hidden forex markups.

• Document repository – Upload tuition invoices, admission letters, and more in one place.

• 24/7 support – Human assistance when you need it.

• Regulatory compliance – Fully aligned with RBI’s LRS and TCS mandates.

Whether it’s university fees, family maintenance, or medical payments, HOP Remit gives you the best rates and the fastest experience.

See How HOP Remit Stands Apart from All Other Remittance Platforms!

Ready to send money abroad the smart way?

Start your remittance now with HOP Remit by moneyHOP and experience transparent, swift & secure cross-border payments.

HOP Remit Enables Money Transfers For The Following Purposes:

• Overseas Education – University Fees

• Overseas Education – Living Expenses

• Family Maintenance

• Personal Gift or Donation

Way Forward

Understanding TCS on international money transfers isn’t just about tax—it’s about making smarter financial decisions. With evolving regulations, keeping track of thresholds, exemptions, and refund mechanisms is key. Whether you’re funding education, supporting family, or making global investments, knowing the TCS implications helps you avoid surprises.

Platforms like HOP Remit are making this journey easier. From transparent charges to compliance-ready transactions, they bring you peace of mind when it comes to cross-border money movement.

Stay informed, plan strategically, and choose a partner that keeps you one step ahead.