LRS TCS Calculator | India Foreign Remittance Tax 2026

TCS is a deposit, not a cost, but your cash flow disagrees

Every rupee of Tax Collected at Source lands in Form 26AS under your PAN and offsets your final tax bill; excess gets refunded after you file. On paper it is a timing difference. In your bank account it is real money leaving months early: a ₹15 lakh self-funded tuition remittance in June locks up ₹10,000 until the refund cycle completes the following year.

That reframing changes behaviour in two ways. First, stop optimising to avoid TCS at the cost of worse exchange rates or shady channels, the tax comes back, a bad FX spread does not. Second, keep the Form 27D certificate the bank issues for every collection; it is your proof when 26AS and your return need to reconcile, and chasing a missing certificate in filing season is nobody's favourite week.

The ₹10 lakh threshold is one bucket, not many

The threshold aggregates across ALL your LRS remittances in the financial year, every purpose except tour packages, every bank, tracked against your PAN. Send ₹4 lakh for a cousin's tuition, ₹3 lakh for a medical bill, and ₹4 lakh as a gift, and you are ₹1 lakh over the line even though no single transfer looked threatening.

Banks see their own ledger, not each other's, so the reporting burden of cross-bank aggregation is effectively yours: declaring prior remittances accurately on each bank's LRS form is what keeps the collection correct at source instead of becoming a mismatch notice later. Tour packages are the exception in both directions, they never count toward the ₹10 lakh pool, and they get their own flat 2% from the first rupee.

Budget 2026's contribution was rate relief: education and medical remittances above the threshold dropped from 5% to 2% with effect from 1 April 2026, and the old two-tier tour package structure (5% then 20%) collapsed into the flat 2%. On a ₹20 lakh package, the upfront collection fell from ₹2,50,000 to ₹40,000, cash-flow relief of over ₹2 lakh for the same holiday.

The education-loan exemption is the most underused line in the section

Remittances funded by an education loan from a recognised financial institution attract ZERO TCS, no threshold, no rate, nothing. A family remitting ₹30 lakh across two years of a foreign degree pays ₹40,000 of upfront TCS if self-funded and ₹0 if the same money routes through a Section 80E-recognised loan, on top of whatever interest deduction the loan itself earns.

The route matters mechanically: the bank applies the exemption when the remittance is coded as loan-funded education and the loan paperwork is on file. Families who take the loan but remit from a savings account out of habit pay TCS they never owed. If the loan exists, remit from the loan disbursement flow and say so on the form.

For everyone else, sequencing still helps at the margin: a family planning both a tour package and a tuition remittance cannot share thresholds between them anyway, but timing large gift-purpose transfers across two financial years splits them over two ₹10 lakh pools legitimately.

Claiming it back without drama

At filing time the TCS credits in Form 26AS and AIS set off against your total tax liability, salary TDS already covering most of it means the TCS usually converts into a refund. The reconciliation failures are mundane: a remittance made under a family member's PAN whose return never claims it, a bank coding the purpose wrong, a missing 27D. Check 26AS a month after any large remittance, while the bank can still fix its reporting easily.

Salaried remitters have a smoother lever since the rules began allowing TCS to be set off against salary TDS: hand your employer the TCS details and monthly withholding drops correspondingly, converting the year-end refund into current-year cash flow. For a parent making regular tuition remittances, that is the difference between financing the government interest-free for a year and not.