The short answer
- Under the RBI’s Liberalised Remittance Scheme (LRS), each resident individual can send up to USD 250,000 per financial year. Studies abroad are included, and banks may allow more for a student based on the university’s cost estimate.
- You’ll need a PAN and a completed Form A2 for remittances under LRS.
- TCS since 1 April 2026: none on education payments funded by a loan from a bank or notified financial institution. 2% on self-funded education remittances above ₹10 lakh, down from 5%.
- TCS isn’t a fee. It counts as tax paid by the person who sent the money, and can be set off against their tax or refunded through their return.
- Pay tuition by bank transfer, or by the route your university specifies. Use a forex card or a local account for day-to-day spending.
The LRS limit and what counts
The LRS lets resident individuals, including minors, send up to USD 250,000 abroad in each financial year (April to March). Studies abroad are one of the purposes it covers. The RBI also lets banks allow remittances above USD 250,000 for studies, based on the estimate from the institution abroad.
A few rules that trip families up:
- Everything counts. All foreign exchange you buy or send through any source in India counts towards the limit, including wire transfers, forex cards and cash.
- The limit is per person. It applies to the person sending the money, which for most students means a parent.
- Paperwork. Giving your PAN is mandatory, and you fill in Form A2 to buy foreign exchange under LRS. Banks will usually also ask for the admission letter and fee invoice.
TCS on education payments (as of October 2026)
Tax collected at source (TCS) is collected by your bank when you send money under LRS. Since 1 April 2026, it falls under section 394 of the Income-tax Act, 2025, which replaced section 206C(1G) of the old Act. The 2026 Budget cut the rate for education and medical treatment from 5% to 2%.
| What you’re sending | TCS |
|---|---|
| Total LRS remittances up to ₹10 lakh | None |
| Education fees paid with a loan from a bank or notified financial institution | None |
| Education, self-funded, above ₹10 lakh | 2% |
| Medical treatment, above ₹10 lakh | 2% |
| Other purposes, such as gifts or investments, above ₹10 lakh | 20% |
What this means for your family:
- Loan-funded fees: the exemption covers a loan from a “financial institution”. That means a bank, or an institution the Central Government has notified. If you borrow from an NBFC, check that it is notified. See our education loans guide.
- Getting it back: the law treats TCS as tax paid on behalf of the person it was collected from. It’s set off against their income tax, and any excess comes back as a refund when they file their return.
- The threshold: the Act applies the ₹10 lakh threshold to “an amount or aggregate of the amounts” sent under LRS. Before a large payment, ask your bank exactly how it will calculate TCS.
Ways to move money
| Method | Good for | Watch out for |
|---|---|---|
| Outward remittance (wire transfer) from your Indian bank | Tuition, housing deposits, large amounts | Exchange rate margin, bank charges, intermediary bank fees, and a few days in transit |
| The university’s own payment route | Tuition, when your university asks you to use it | Use only links from the university’s official portal or invoice, and compare the rate you’re quoted |
| Prepaid forex card | Your first weeks of spending, and travel | Loading, ATM and cross-currency fees. Counts towards your LRS limit. |
| Indian debit or credit card abroad | Backup and emergencies | Foreign currency mark-ups and card limits |
| Local bank account abroad | Rent, bills, daily spending and part-time wages | Opening requirements, covered below. Fund it with a remittance from India. |
To compare offers, look at the total cost: the exchange rate you get compared with the day’s reference rate, plus every fee. A low headline fee can hide a poor rate. When paying tuition, always put the student’s name and ID or invoice reference exactly as the university asks, so the payment is matched to you.
Opening a bank account when you arrive
United Kingdom
The UK has replaced biometric residence permits (BRPs) with eVisas, and gov.uk says all BRPs have now expired. You prove your immigration status online through your UKVI account, which can generate a share code to give to others. Each bank sets its own ID and address checks. Bring your passport, your eVisa details, a UK address and an enrolment letter from your university, and ask the bank what else it needs. Your university’s international student team can usually tell you which banks students use.
Canada
The Financial Consumer Agency of Canada says you can open a bank account with proper identification even if you’re not a Canadian citizen. A foreign passport is accepted as ID. You generally show two pieces of ID, or one piece plus a person the bank trusts who confirms your identity. Take your study permit too.
United States
Requirements differ by bank. Bring your passport, I-20 and visa, along with proof of your US address. Ask whether the bank can open an account without a Social Security number, because you may not have one when you arrive. Your international student office will know which local banks work for students.
A simple money plan for your first term
- Before you fly: pay the tuition deposit and first instalment by bank transfer. Keep every receipt and TCS certificate.
- Travel money: load a forex card, or carry a modest amount of local currency, for your first two to three weeks.
- Week one: open a local account, then switch rent and bills to it.
- After that: top up living money from India with periodic transfers, and track the total against the LRS limit.
- At home: ask your Indian bank whether your account status needs to change now you live abroad, because FEMA treats residents and non-residents differently.
Working out how much you’ll need? Read what a UK Master’s really costs and our accommodation guide, and compare countries on Compare destinations.
Sources
- Reserve Bank of India, Master Direction: Liberalised Remittance Scheme (checked Oct 2026)
- Reserve Bank of India, LRS FAQs (checked Oct 2026)
- Income Tax Department, Income-tax Act, 2025, section 394 (TCS) (checked Oct 2026)
- Income Tax Department, Income-tax Act, 2025, section 390 (credit for TCS) (checked Oct 2026)
- Income Tax Department, Income-tax Act, 2025, section 129 (definition of financial institution) (checked Oct 2026)
- Union Budget 2026–27, Budget speech (PDF) (checked Oct 2026)
- Union Budget 2026–27, Memorandum explaining the Finance Bill (PDF) (checked Oct 2026)
- GOV.UK, Biometric residence permits (checked Oct 2026)
- GOV.UK, View and prove your immigration status (checked Oct 2026)
- Financial Consumer Agency of Canada, Opening a bank account (checked Oct 2026)
