A resident individual can send up to USD 2,50,000 per financial year under the Liberalised Remittance Scheme. The scheme is open for studies abroad. Does your course cost more? Your bank may allow a bigger transfer, based on the estimate from the institution abroad. Both rules sit in the RBI Master Direction on LRS, page last updated 5 September 2026. Everything else in student forex — the TCS, the blocked account, the card you carry — hangs off that one limit.
How much money can a student send abroad in a year?
USD 2,50,000 per financial year, April to March, per resident individual. The RBI Master Direction says the scheme “is available to all resident individuals including minors”. It adds that students can remit up to the limit “for studies abroad without insisting on any estimate from the foreign University”.
Two things get missed here. First, the limit is per individual, not per family. A student, a parent and a second parent each have their own USD 2,50,000. Second, the limit is not a wall. Banks “may allow remittances exceeding USD 2,50,000 based on the estimate received from the institution abroad”. So a two-year programme at a US university does not need creative structuring. It needs the university’s cost estimate.
Providing your PAN is mandatory for any LRS remittance. Do not attempt an LRS transfer for a student who has no PAN.
What are the LRS rules and TCS rates for education?
| Rule or limit | Figure | Applies to | Source |
|---|---|---|---|
| LRS annual limit | USD 2,50,000 per financial year | Every resident individual, including minors | RBI Master Direction on LRS, updated 5 Sept 2026 |
| Above the limit for studies | Permitted on the institution’s estimate | Remittances for education | RBI Master Direction on LRS |
| PAN | Mandatory | All LRS remittances | RBI Master Direction on LRS |
| TCS threshold on LRS | ₹10,00,000 in a financial year | All LRS remittances | Union Budget 2025-26, PIB summary — raised from ₹7,00,000 |
| TCS on education and medical remittances | Proposed cut from 5% to 2% | LRS remittances for education and medical purposes | Union Budget 2026-27, PIB summary |
| TCS on overseas tour packages | Proposed 2%, no amount stipulation | Tour programme packages, not tuition | Union Budget 2026-27, PIB summary |
The 2026-27 change is a Budget proposal. Check the rate in force on the day you remit. Your bank will collect whatever the law says that day. It will not apply what a Budget speech said in February.
Is TCS on education remittances a real cost?
No. This is the most misread number in student forex. Tax collected at source is not a tax on you. It is an advance credited to your PAN. You set it off against your tax bill. Or you claim it back as a refund when you file.
It is still a cash flow problem. The money leaves your account when you can least afford it. It comes back a year later. Plan the fee transfer with that gap in mind. Sending from the student’s own PAN adds a step. If the student has no income, the refund needs a return that would not otherwise be filed.
Loan-funded transfers are treated separately. Section 206C(1G) of the Income-tax Act covers them. The rate for loan-funded education transfers has been lower than the standard rate. Ask your bank for the current rate for your case. Do not assume it. Our page on LRS and TCS rules has the detail.
What is a blocked account, and do you need one?
Some countries require proof that you can support yourself before they grant a study visa. Germany’s blocked account is the best known example. You deposit a set annual amount, and the account releases only a fixed sum to you each month.
Two things to know. The required yearly amount is set by the destination country. It is revised often. Take the figure from the German Federal Foreign Office, or from your own destination’s official visa page, on the day you apply. The deposit is also an LRS transfer. So it counts against your USD 2,50,000. It can trigger TCS on its own, before you have paid a rupee of tuition.
Providers also charge a setup fee. Some charge a monthly fee too. Compare the all-in cost, including the exchange rate spread. Do not compare the headline fee. The spread is usually the bigger number.
How should you actually move the money?
Split it by purpose. The three flows are not the same problem.
| Item | Details |
|---|---|
| Tuition. | A bank wire in the university’s name, straight to its account. Never route tuition through a friend’s account or a peer transfer app. Universities reject third-party payments. The money can then sit unallocated for weeks. |
| Living costs. | Open a local bank account in the first month. Receive a lump sum there. A local account beats an Indian card for rent and bills. |
| The first two weeks. | A forex card loaded before you fly, plus a little cash. This is the only stretch where a forex card really wins. |
Compare the exchange rate you are quoted, not the fee. Say a bank charges no transfer fee. If its rate is two per cent off the interbank rate, it costs you more than a flat fee on a tight rate. Our page on remittance services shows how to read a quote. The forex card versus credit card versus cash page covers what to carry.
The mistakes that cost students the most
The commonest is taking dynamic currency conversion abroad. A card machine offers to bill you in rupees. Decline it. The rate used is the merchant’s. It is worse than your bank’s. We cover this in dynamic currency conversion.
The second is using an Indian credit card for daily spending abroad. Most Indian cards add a forex markup on every foreign transaction. It is charged on top of the conversion rate. See forex markup charges.
The third is forgetting that your status changes. Once you become a non-resident, your old accounts must be redesignated. LRS no longer applies to you either. Our guide to NRE, NRO and FCNR accounts covers the shift.
Frequently asked questions
Can my parents send me money on top of my own LRS limit?
Yes. The USD 2,50,000 limit is per resident individual, per financial year. The RBI Master Direction confirms the scheme covers maintenance of close relatives. Each parent has a separate limit.
Do I pay TCS on the full amount I remit?
TCS applies above the yearly threshold. The Union Budget 2025-26 raised that threshold from ₹7,00,000 to ₹10,00,000 for LRS transfers. Your bank collects it and credits it to your PAN. So it cuts your tax bill, or comes back as a refund.
Is a blocked account counted under LRS?
Yes. It is money sent abroad by a resident individual. So it sits inside the USD 2,50,000 limit. It can attract TCS just as a tuition transfer does.
What if my course costs more than USD 2,50,000 a year?
Your bank may allow a bigger transfer for studies. It does so on the estimate received from the institution abroad, as the RBI Master Direction on LRS states. Get that estimate on university letterhead. Give it to the bank before you start the transfer.
Should I open a forex card or a foreign bank account?
Both, in that order. The forex card covers arrival. The local account covers everything after week two. It is cheaper for rent, transport and food. Using a forex card as your main method for a whole degree is an expensive habit.
Sources
- Reserve Bank of India, Master Direction — Liberalised Remittance Scheme. rbi.org.in. Page last updated 5 September 2026. Primary source.
- Press Information Bureau, Union Budget 2025-26 summary — TDS/TCS rationalisation, LRS threshold raised from ₹7 lakh to ₹10 lakh. pib.gov.in. Primary source.
- Press Information Bureau, Summary of Union Budget 2026-27 — proposed TCS cut from 5% to 2% on LRS education and medical remittances. pib.gov.in. Primary source.
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