The Union Budget 2025 has raised the threshold for tax collected at source (TCS) on remittances under the Liberalised Remittance Scheme (LRS). The limit has increased from ₹7 lakh to ₹10 lakh. This change will affect those sending money abroad for travel, education, and other expenses.

How this affects foreign travel

If your international travel expenses exceed ₹10 lakh in a financial year, TCS will apply. Currently, TCS rates for foreign travel are:

5% on amounts above ₹10 lakh

20% on amounts above ₹7 lakh for other remittances (except education and medical expenses)

This means higher upfront costs for those spending heavily on overseas trips.

However, TCS paid can be adjusted while filing income tax returns.

Impact on education and medical remittances

The government has removed TCS on education remittances made through loans from specified financial institutions. If you send money abroad for education without a loan, a 5% TCS applies above ₹7 lakh. For medical expenses, the 5% TCS rule remains unchanged.

Investments, gifts, and other remittances abroad still attract 20% TCS for amounts above ₹7 lakh.

This affects those investing in foreign stocks, real estate, or sending money as gifts to relatives overseas.

What this means for you

• Small remittances below ₹10 lakh face no TCS.
• Large foreign travel spends will attract higher upfront tax payments.
• Those funding education through loans get relief.
• TCS paid can be claimed later as a tax credit.
• The revised limits aim to ease compliance for small taxpayers while maintaining checks on high-value transactions.