Reduce TCS for Parents Sending Money to Children Studying Abroad: Mumbai Cong Chief to Sitharaman

Mumbai Congress chief and former Maharashtra minister Varsha Gaikwad has written to Union Finance Minister Nirmala Sitharaman requesting that the tax collected at source (TCS) on international money transfers be reduced for families sending money to children pursing education abroad as per The Liberalised Remittance Scheme (LRS) of the Reserve Bank of India.

As per the current regulations, a 5% TCS is levied on international transactions exceeding Rs 7,00,000. Gaikwad has requested to reduce the TCS rate from existing 5% to 2% and an increase in the transaction limit to Rs 10,00,000.

In her letter to Sitharaman, Gaikwad said that increasing the limit to Rs 10,00,000 will provide relief to parents as they will be able to send more money to their children studying abroad. Reducing the TCS rate from 5% to 2% will also reduce the financial burden on such parents, she said.

“It is essential to note that many families lack the financial security to pay for education expenses upfront. They often resort to pawning jewellery or mortgaging their houses to acquire the necessary funds,” Gaikwad, who held the school education portfolio in the previous Uddhav Thackeray government, said in the letter.

Gaikwad is of the opinion that the issue is not restricted to students from Maharashtra, but is common to families across India that dream of international education for their children.

“Typically, a student requires Rs 25,00,000 for education abroad. For instance, if a family intends to send Rs 25,00,000 for education expenses, they would incur a substantial TCS fee of Rs 90,000, which places a significant burden on their income,” the letter further said.

“Such revisions would alleviate the financial burden on students and their families. The TCS amount often acts as a decisive factor for many families wishing to support their children’s higher education abroad,” she said.