Parents planning their child's overseas education require efficient solutions for paying university and other fees. HSBC India, among others, has recently launched its global education payments service, which allows the bank's customers to transfer monies directly to international universities through the HSBC India mobile banking app.
Overseas education is on the rise among India's affluent families. According to an HSBC study, 78 percent of high-net-worth Indian parents plan to send their children abroad for education, or already have a child studying overseas. Through this service, customers can wire funds to the pre-verified account of the university. They need to add the student's details, upload loan documents securely, and make payments.
What does the service entail?
According to the official release, HSBC India’s customers can directly wire payments to over 600 universities across five countries / territories, including the US, UK, Canada, Hong Kong, and Australia. The payments can be made for tuition fees, accommodation, healthcare, insurance, and other university-related expenses. It takes one to five working days for the transfers to go through.
All payments are subject to LRS (liberalised remittance scheme) limits and adhere to banking regulations. The LRS has a limit of $2,50,000 per financial year for foreign education fees, which covers tuition, living expenses, books, travel expenses, and insurance.
Students can also apply for loans through the facility. Remember, overseas education loans are subject to 0.5 percent TCS (tax collected at source) per the amended tax rules of 2023. The TCS rate for other educational remittances above Rs 7 lakh is 5 percent. The customer making the remittance will be able to claim credit for the TCS in her / his income tax return.
What are the charges?
While HSBC doesn't charge anything for transferring the money, depending on the currency and country of the recipient, there could be applicable taxes. You can view the tax estimate while transferring the funds.
Also read | Planning to study abroad? Here's how to maximise your chances of winning a scholarship
Can the funds transferred to a university be rejected?
Yes, funds transfer rejections can occur due to incorrect account details or cross-border transfer sanctions. For assistance, you should reach out to your HSBC branch or relationship manager.
I've made a payment, but realise that the university's bank details are incorrect. Can I stop or reverse the transfer?
To pause or recall funds, you need to contact your relationship manager or customer service promptly, ideally within three to five working days after initiating the transaction.
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