Union Budget 2025-26: Indian Study Abroad Aspirants Get Tax Break
There is good news for Indian study abroad aspirants who are planning to pursue higher education from outside the country. The government has announced the revision of the Tax Collected at Source (TCS). Read the details here.
Study Abroad: Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on Saturday. She has announced a tax break for the study abroad aspirants in India with the revised Tax Collected at Source (TCS) rates on foreign remittances.
The announcement is going to ease the financial burden on the students planning to study abroad. Under the revised TCS rates on Foreign remittance, for educational loans from approved charitable institutions or recognized financial institutions under section 80E of the IT Act, there is no TCS applicable for remittances up to INR 7 lakh and remittances above INR 7 lakh.
For the institutes which are not covered under the 80E, to take educational loans from such institutes, the TCS rates stand at 5% on the amount increasing INR 7 lakh, as reported by Economic Times.
Union Budget 2025-26 Proposes Revision Of TCS
The government has proposed direct tax reforms in the latest budget to achieve good governance.
About TCS, the government statement says, "Rationalization of TDS/TCS for easing difficulties: The limit for tax deduction on interest for senior citizens is proposed to be doubled from the present INR 50,000 to INR 1 lakh. Similarly, the proposals include annual limit of INR 2.40 lakh for TDS on rent to be increased to INR 6 lakh. This will reduce the number of transactions liable to TDS, thus benefitting small tax payers receiving small payments. The provisions of the higher TDS deduction will now apply only in non-PAN cases. Further, the threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from INR 7 lakh to INR 10 lakh. Also, the delay for payment of TCS up to the due date of filing statement is proposed to be decriminalized."
"Scheme proposed for determining arm's length price of international transaction for a block period of three years, to streamline the process of transfer pricing and to provide an alternative to yearly examination, in line with global best practices. With a view to reduce litigation and provide certainty in international taxation, the scope of safe harbour rules is being expanded. Parity has been proposed in rates of long term capital gain tax on transfer of securities by non-resident. Further, a proposal has been made to exempt withdrawals made from National Savings Scheme accounts by individuals on or after the 29th August, 2024, while also proposing to allow similar treatment to NPS Vatsalya accounts, subject to overall limits," added the government.
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