TCS (Tax Collected at Source) applies when a resident Indian remits money abroad under the Liberalised Remittance Scheme (LRS). From 1 April 2025 the threshold is Rs 10 lakh per financial year; remittances above it attract 20% TCS for general purposes and investments, 2% for education/medical/tour packages after Budget 2026, and 0% where overseas education is funded by a Section 80E loan. TCS is not a tax - it is fully adjustable against your income-tax liability or refundable.
Who this actually affects (and who it does not)
LRS is a facility for residents, not NRIs - an NRI cannot remit under LRS. So TCS matters to three groups around the NRI ecosystem: returning Indians who have become resident again and now remit abroad; resident parents/relatives sending money to NRI children (gifts, maintenance, investments); and soon-to-emigrate individuals moving funds before departure. NRIs themselves repatriate through the NRO/NRE route (Form 15CA/15CB), a different regime with no TCS.
The rates in 2026 (Section 206C(1G))
General / investments / gifts: 20% on the amount above Rs 10 lakh in the financial year. Education funded by a Section 80E institution loan: 0%. Self-funded education and medical treatment: 2% above Rs 10 lakh (reduced in Budget 2026). Overseas tour packages: 2%. The Rs 10 lakh threshold is cumulative across all LRS remittances in the year, tracked by your bank.
How to get the TCS back
TCS collected by your bank is deposited against your PAN and appears in Form 26AS / AIS. You claim it as a credit when you file your return - it reduces tax payable or is refunded. Salaried remitters can also have it adjusted against TDS by informing their employer. Keep the bank's TCS certificate.
Practical points for NRI families
A resident gifting to an NRI child counts toward the same Rs 10 lakh / 20% TCS test - plan large transfers across financial years where sensible. Returning NRIs in their RNOR window should sequence overseas remittances carefully (see our RNOR planning guide). For detailed mechanics and worked examples, RTA & Associates maintains a deeper technical write-up: Understanding the TCS rules for foreign remittances. See also our NRI tax advisory service.
How NRI Blueprint helps
We map your remittance and TCS position, sequence transfers around your residency status, and make sure nothing is left unclaimed at filing. Book a strategy call.