Budget 2024 Update: Lower TCS on Overseas Education Loans

Planning to study in the USA? Budget 2024 just made education loans even more attractive compared to self-funding — thanks to a lower Tax Collection at Source (TCS) on foreign remittances for education.

Let’s break it down.

📢 What’s New in Budget 2024?

• A big push on education and skill development with ₹1.48 lakh crore allocated.

• A key update for students going abroad: lower TCS rate of 0.5% on remittances made via overseas education loans (above ₹7 lakhs).

• Self-funded students still face a higher TCS of 5% on amounts over ₹7 lakhs.

💡 What is TCS on Foreign Remittance?

TCS (Tax Collection at Source) is a tax collected by authorized remittance service providers (like banks) when you send money abroad — including for education.

As per Budget 2024, the TCS rates are different based on how you're funding your studies:

📊 TCS Comparison: Self-Funding vs. Education Loan

Funding Type	Amount Remitted	TCS Rate
Self-Funding	Up to ₹7 lakhs	0%
	Above ₹7 lakhs	5%
Education Loan	Up to ₹7 lakhs	0%
	Above ₹7 lakhs	0.5%

💰 Example:

If your total expenses for U.S. education = ₹12 lakhs

• Self-Funded: TCS = 5% of ₹5 lakhs = ₹25,000

• Education Loan-Funded: TCS = 0.5% of ₹5 lakhs = ₹2,500

Savings with Loan: ₹22,500!

🧾 Other Costs to Know

• GST on remittance: ~0.18%

• Bank/service charges: Varies by provider

Even with these, education loans offer significant savings on TCS alone.

✅ Final Takeaway

If you're planning to study in the U.S. (or any other country), financing through an overseas education loan is now much more tax-efficient than self-funding — especially for amounts above ₹7 lakhs.

Make sure to:

• Explore all loan options

• Check your eligibility

• Compare interest rates and repayment terms