Tax Collected at Source (TCS) is a tax regulation launched by the Government of India on 1 October 2020 for remittances under the Liberalised Remittance Scheme (LRS). While the original regulation stipulated a 5.0% tax on payments exceeding ₹7 lakh within India’s financial year (April to March), from 1 April 2025 the government has introduced exemptions and revised rates.
No TCS will be applied if the payment is financed through an education loan from a recognized institution under Section 80E of the Income Tax Act. Additionally, the annual TCS-exempt remittance limit has been increased to ₹10 lakh (1,000,000 INR; approximately 11,700 USD) for self-funded remittances, and remittances for education and medical purposes up to ₹10 lakh are fully exempt, whether self-funded or loan-financed. For self-funded education remittances exceeding ₹10 lakh, 5% TCS will apply, while other LRS transactions exceeding ₹10 lakh will incur 20% TCS.
The PAN (Permanent Account Number) of the payer will be used to determine TCS applicability. If applicable, TCS will be collected on top of the amount to be paid to your institution and Flywire’s banking partner will remit the funds to the tax authorities in India.
A quarterly TCS certificate will be issued by Flywire’s banking partner to the payer’s email address and the tax certificate can be used to claim the amount when filing your annual tax return.