Tax Collected at Source (TCS) for Indian Payments (INR)

Tax Collected at Source (TCS) is a statutory requirement under the Income-tax Act, applicable to foreign remittances made under RBI’s Liberalised Remittance Scheme (LRS), and is collected by Authorised Dealers at the time of processing the remittance. The applicability of TCS depends on the source of your funds, your total remittance amount within the financial year, and your chosen payment method.

What are the TCS rates and exemptions for my payment?

For international education payments originating from India, the rates are structured as follows:

• Self-funded payments (up to INR 10,00000(10 lacs)*): 0% TCS.
• Self-funded payments (exceeding INR 10,00000(10 lacs)*): 2% TCS applies only to the amount exceeding the INR 10,00000(10 lacs) limit.
• Education loan (Section 80E): 0% (Nil) TCS for the amount funded by an education loan. The loan should be obtained from a financial institution/Bank as defined in Section 80E for the purpose of pursuing education.

Combination of education loan funds (Section 80E) and own funds:

For payments funded through a combination of an education loan and personal savings, TCS shall be applicable as follows:

• Nil (0%) TCS shall apply on the portion funded through an education loan from an approved institution under Section 80E.
• 2% TCS shall apply to the portion funded through personal savings, but only on the amount exceeding INR 10,00,000(10 lacs) in a financial year.

*Threshold Limit: The INR 10,00,000(10 lacs) threshold applies to the aggregate amount of remittances made under the LRS per PAN in a financial year (April to March), irrespective of the source of funds, mode of payment, or authorised dealer.

How is TCS calculated and collected?

The method of collection depends entirely on the payment method selected during your Flywire booking:

TCS collected via Flywire

Applicable methods: Domestic Bank Transfer in INR

How it works: For certain Authorized Dealer (AD) entities, the TCS may be included upfront in your total booking amount. In other cases, it may be applied separately during the net banking journey. Flywire facilitates the indicative calculation. Upon entering your PAN details, the applicable TCS is automatically computed and reflected in the total INR amount.

Where to view the breakdown: You can review the exact tax breakdown during the "Review & Confirm" step, or on your payment tracking page by clicking the info (i) icon next to the "Including taxes" section.

TCS collected by your financial institution

Flywire does not calculate or collect TCS in the following cases. Your payment to Flywire will only include tuition and fees; taxes are handled externally:

• Online Bank Transfer in INR (e.g., HDFC, SBI): Your bank will assess and deduct TCS directly from your bank account as a separate line item.
• Card Payments (Visa/Mastercard/Amex/Diners): Please check with your card-issuing bank. If applicable, this tax will be charged to your monthly credit card statement.
• International Bank Transfers: Please check directly with your local bank or FX agent regarding how TCS will be collected before sending funds.

Why is my PAN (Permanent Account Number) required?

As per RBI, all LRS transactions must be tracked against the payer's PAN:

• Tracking Limits: The CIMS Portal of RBI uses your PAN to monitor your annual remittance limit of USD 250,000 under the LRS scheme.
• Accuracy: It is critical to provide the exact PAN details of the person funding the payment to ensure the correct tax rate is applied.

Claiming TCS and the Tax Certificate

TCS is not an extra cost; 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 if you have no tax liability when filing your ITR.

Issuance: Flywire’s RBI Authorised Dealer will issue a quarterly TCS Certificate in the prescribed form.