Nirmala Sitharaman’s Union Budget for 2025-26 has delighted Indian students wishing to study overseas, featuring a notable tax reduction intended to lighten their financial load. The updated Tax Collected at Source (TCS) rates on international remittances stand out significantly, facilitating access to overseas education.
So, what has precisely altered? The TCS rates have been updated for educational loans from recognized financial institutions or sanctioned charitable organizations as outlined below:
– Remittances up to Rs 7 lakh: TCS is not applicable.
– For remittances exceeding Rs 7 lakh: TCS does not apply if the loan is from a body governed by Section 80E of the IT Act.
Nonetheless, if the educational loan comes from an entity not included in Section 80E or for different educational reasons, the TCS rate is set at 5% on the sum that surpasses Rs 7 lakh.
Before this revision, authorized dealers had to collect TCS at 0.5% on remittances up to Rs 7,00,000 each financial year for educational loans from recognized financial institutions or approved charitable organizations under Section 80E of the Act. For remittances over Rs 7,00,000, a 0.5% TCS is imposed.
The decrease in TCS rates is expected to greatly affect students and their families, rendering international education more economically viable. The government’s emphasis on enhancing the nation’s education and skill development sectors is clear in this action, as pointed out in the Union Budget 2025-26.
Along with the updated TCS rates, the government has set aside Rs 1.48 lakh crore for education, jobs and skill development. This entails financial assistance for loans up to Rs 10 lakh for higher education at national institutions, along with e-vouchers and interest subsidy advantages.
“Nirmala Sitharaman’s Union Budget for 2025-26 marks an important advancement in enabling Indian students to realize their aspirations of studying overseas. The updated TCS rates and higher funding for education, employment, and skills training reflect the government’s dedication to cultivating a skilled and knowledgeable workforce. This action will surely enhance the accessibility and affordability of international education for Indian students, closing the divide between talent and opportunity.” – Gaurav Batra, CEO of Infinite Group.
Nirmala Sitharaman’s Union Budget 2025-26 has implemented initiatives expected to enhance the financial viability of studying overseas for Indian students, demonstrating the government’s dedication to promoting education and skill enhancement.
