When making an international education payment from India, Tax Collected at Source (TCS) may apply to your transaction depending on your funding source and the payment method used. We have compiled the most frequently asked questions to help you navigate this process smoothly.
Disclaimer: For the most up-to-date tax information, please consult your tax advisor.
Can I make a split payment for a single INR payment?
No. We are unable to accept split payments, underpayments, or overpayments for a single booking. The exact payment amount you book is used to calculate the applicable TCS. Flywire must receive your payment in full, in a single transaction, for the exact amount indicated in your payment instructions. If the amount does not match, Flywire will return the funds to you.
If I use education loan funds/combination of education loan funds and own funds, do I still have to pay TCS?
This depends on the source of your funds. Starting April 1, 2026, the Indian government will implement a lower, more uniform TCS rate for specific cross-border transactions:
- Education loan funds: If you are funding your payment through a loan from a specified financial institution (Section 80E), the TCS rate is 0% for the amount funded via the education loan.
- Combination of education loan and personal savings: The TCS rate will depend on whether the savings portion crosses the threshold of INR 10,00000(10 lacs). In case the payment funded with own funds exceeds the threshold, the excess over INR 10,00000(10 lacs) will attract 2% TCS.
- Personal Savings (Purely): Up to INR 10,00000(10 lacs), no TCS is collected. For remittances funded purely by personal savings, a 2% TCS rate applies specifically to the amount exceeding the INR 10,00000(10 lacs) annual threshold.
What is a Loan Disbursement Letter/Statement for TCS exemption?
To qualify for the 0% TCS rate on money sent from your education loan, you need to provide official proof from your bank or lender. You must show a formal document, such as a disbursement letter or a loan account statement, to prove you have received the funds.
To avoid processing delays, ensure this document clearly includes:
- Borrower’s details: Name and address of the borrower.
- Loan details: Information about the loan type (e.g., education loan), loan amount, and account number.
- Disbursement amount: The specific amount of money disbursed (entire amount or a portion).
- Disbursement date: The date the funds were transferred to the borrower's account.
- Account number of the recipient: The account number to which the amount was transferred.
- Interest rate: The interest rate applied to the loan.
- Bank contact information: Details for customer service or the loan officer.
If I pay from a joint bank account, whose PAN determines the TCS?
The tax applicability depends entirely on the PAN (Permanent Account Number) details provided when creating the payment request. Whichever account holder’s PAN details you enter during the Flywire booking process will determine the tax, regardless of other names on the joint account.
If I request a tuition refund, will the TCS amount be refunded by Flywire?
No. Flywire is unable to return the TCS amount if you request a refund. Upon receiving your funds, the TCS is immediately deducted and remitted to the tax authorities in India.
Note: TCS is not an additional tax; it is an advance tax payment reflected in the payer's Form 26AS/AIS. You can offset it against your total income tax liability in India, or claim a full refund when filing your annual tax return if you have no tax liability.