TCS exemption limit raised to Rs 10 lakh in Union Budget 2025, relief for students and travellers

India Inc leaders also gave a thumbs up to the government’s continued focus on its Make In India agenda.

Finance Minister Nirmala Sitharaman has announced a significant change in the Union Budget 2025, proposing to raise the threshold for collecting Tax Collected at Source (TCS) on Liberalised Remittance Scheme (LRS) transactions from Rs 7 lakh to Rs 10 lakh. It also proposed to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.

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Students studying abroad get relief from TCS on education remittances

Sudarshan Motwani, Founder & CEO of BookMyForex, hailed the proposed exemption of Tax Collected at Source (TCS) on education-related remittances funded through student loans, calling it a significant relief for students and their families. This move will help alleviate financial strain, ensuring that education funds are utilised effectively, rather than being locked in tax credits, he said.

According to Rajarshi Dasgupta, Executive Director of AQUILAW, the proposed exemption is expected to significantly ease the financial load on students pursuing higher education abroad, thereby increasing their disposable income.

Also read | Hike in basic exemption limit, rejig of tax slabs mean big savings for taxpayers

Benefits of increasing the TCS exemption limit

Raising the TCS exemption limit from Rs 7 lakh to Rs 10 lakh for non-educational remittances is expected to greatly benefit travellers. According to Motawni, this change will provide travellers with more flexibility, reduce upfront costs, and make international travel more affordable.

The increased TCS exemption limit also brings greater flexibility for investors looking to diversify their portfolios in global markets, particularly those investing in US stocks, notes Nikhil Behl, Co-Founder and CEO of INDmoney.