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As per the regulations under the Liberalized Remittance Scheme, resident individuals, including minors, can carry up to USD 2,50,000 per financial year (April - March) without any restrictions. However, for a particular trip, only USD 3,000 of that amount can be carried in the form of currency notes. The balance should be carried in the form of prepaid forex cards, traveller's cheque, or banker's draft.
To purchase foreign currency, you will need your passport, PAN, valid visa, current address proof, and confirmed return air ticket.
Yes, for all foreign exchange transactions, resident individuals must provide their Permanent Account Number (PAN).
In the event of trip cancellation, the foreign exchange taken for the specific travel must be surrendered within 60 days from the date of purchase.
A "person resident in India" is defined under Section 2(v) of FEMA, 1999, as an individual who has resided in India for more than 182 days during the preceding financial year. However, the definition excludes those who have gone out of India or are staying outside India for employment, business or vocation, or any other purpose indicating their intention to stay outside India for an uncertain period. It also excludes foreign bodies, offices, or agencies owned or controlled by residents outside India.
Individuals can pay for foreign exchange themselves, or:
- Father or Step Father
- Mother or Step Mother
- Son and Step son
- Son's Wife
- Daughter's husband
- Brother or Step brother
- Sister or Step Sister
* For certain transactions, only payments from the customer's own account will be accepted. Individuals should use their savings bank account only to purchase foreign exchange.
No, as per RBI guidelines, third-party payments are not allowed.
* Non-Resident Indians living in India beyond 180 days are eligible to purchase forex
* Foreign nationals who have stayed in India for a minimum of three years, have a PAN card, permanent residency in India, and are not availing facilities for remittances of salary, savings, etc., abroad, are eligible to purchase foreign exchange.
* Similarly, foreign-born wives of Indian nationals who have stayed in India for a minimum of three years, have a PAN card, permanent residency in India, and are not availing facilities for remittances of salary, savings, etc., abroad, are eligible to purchase foreign exchange.
- There is no limit on the amount of foreign exchange that can be brought into India. However, currency notes beyond USD 5000 (equivalent) and up to USD 10000 (total) need to be reported at customs and currency declaration form (CDF) is to be obtained. A CDF is required whenever currency / forex surrender exceeds the respective limits.
Yes, children of all ages are allowed the same entitlements and limits as adults. However, minors and children under the age of 12 cannot carry forex cards or traveller's cheques.
There are no restrictions for residents to hold foreign coins, so surrendering them to an authorized dealer is not necessary.
According to the Government of India, the GST/SGST for any currency conversion, including sale, encashment, and remittance, is based on the gross amount of currency exchanged. The rates are as follows:
- 0.18% of the gross amount of currency exchanged for up to Rs.100,000, with a minimum of Rs.45
- Rs.180 and 0.09% of the gross amount of currency exchanged for amounts exceeding Rs.100,000 and up to Rs.10,00,000
- Rs.990 and 0.018% of the gross amount of currency exchanged for amounts exceeding Rs.10,00,000, with a maximum of Rs.10,800.
To surrender foreign currency, the customer must provide their identification document and proof of address. If the amount exceeds USD 5,000 in currency notes or USD 10,000 in total, a Currency Declaration form (CDF) is also required.
Outward remittance refers to the process of sending money in foreign currency by a resident of Indian to a recipient in another country (excluding Nepal, Bhutan, North Korea, and Iran) for a purpose as approved under the Foreign Exchange Management Act (FEMA).
The money can be sent through various channels such as bank wire transfers, electronic funds transfers, online payment gateways, and other financial institutions. The remittance can be made for various purposes, including education, employment abroad, emigration, foreign travel, medical treatment, etc.
The Liberalized Remittance Scheme is a facility provided by the Reserve Bank of India (RBI) for all resident individuals, including minors, to remit up to USD 250,000 or equivalent per financial year for permissible current or capital account transactions or a combination of both. Corporations, partnership firms, HUF, trusts, and other similar entities are ineligible to access this feature.
Resident of India are eligible to make an outward remittance transaction.
The following remittances can be made through RemitX as per the Liberalized Remittance Scheme:
- University Fee Payments
- Overseas Education - GIC, GBA
- Living expenses/ Accommodation payments
- Personal travel to any country (Nepal and Bhutan being exceptions)
- Examination Fees
- Visa fees
- Fee for participation in global conferences and specialized training.
- Transfer of funds for involvement in international events/competitions (for training, sponsorship, and prize money)
- Payment of fees for overseas job application processing and evaluation, as well as employment.
- Medical care received overseas.
- Any other current account transaction that is not specified under the definition of current account under FEMA 1999.
RemitX charges a nominal fee of Rs. 250 for every remittance transaction.
Nostro bank charges are fees imposed by the sending bank's Nostro bank to process remittances. You will be required to indicate who will bear the fees, either the sender (remitter) or the recipient. If the sender is selected, supplementary charges will be imposed; otherwise, if the recipient is chosen, the ultimate amount will be reduced by the Nostro bank charges.
Once the remittance is completed, a copy of SWIFT/Debit Advice will be mailed to your registered email ID. A swift copy refers to a document that acts as a confirmation of payment made from your bank and informs the beneficiary of the value date of the transaction.
Certainly, you will need to provide physical copies of your self-attested transactional KYC documents. An executive will come to collect the documents from your home or office. This also applies to customers who have completed their Video KYC through the RemitX App.
Individuals can pay for foreign exchange themselves, or:
- Father or Step Father
- Mother or Step Mother
- Son and Step son
- Son's Wife
- Daughter's husband
- Brother or Step brother
- Sister or Step Sister
For certain transactions, only payments from the customer's own account will be accepted. Individuals should use their savings bank account only to purchase foreign exchange.
Remittances under LRS can be made as frequently as desired, but the total amount of foreign exchange purchased or remitted through all sources in India during a financial year must not exceed USD 2,50,000. Once this limit has been reached, the resident individual cannot make any further remittances under this scheme for that financial year, even if the proceeds of investments have been brought back into the country.
To make remittances for permissible AD II transactions, the customer must provide Form A-2 and supporting documents (ID/address proof) that explain the purpose of the remittance. They must also declare that the funds belong to them and will not be used for any prohibited or regulated purposes under the Scheme.
An Indian resident can send up to USD 2,50,000 or equivalent in one financial year as a gift to a non-resident person or as a donation to a charitable/educational/religious/cultural organization outside India. Prior permission from the Reserve Bank is required for remittances exceeding this limit.
Yes, students planning to study abroad can take foreign currency in any form except for currency where a limit of USD 3000 applies. Pre-paid cards can be reloaded by students' parents/guardians at any time during working hours and days. RemitX also offers a direct remittance service to the institute where the student is enrolled.
In general, the foreign exchange entitlement is USD 2,50,000 per financial year (if no part of it has been used for any other purpose under LRS). Transfers surpassing this threshold will be approved based on the estimate obtained from the foreign institution.
A resident individual is required to furnish their PAN for all transactions conducted through Authorized Persons under LRS.
No, remittances can be made in any foreign currency. If the desired currency is not listed, customers can send an email to firstname.lastname@example.org for assistance.
Customers can use the RemitX App or visit any of the RemitX branches to submit the necessary forms/documents with beneficiary and transaction details.
Money can be sent abroad through the following modes:
- Wire Transfer
- Foreign Currency Demand Drafts
By using the RemitX App or by visiting any of our branches and submitting the needed forms/documents with beneficiary and transaction details, you can make an outward remittance.
Under the Liberalized Remittance Scheme (LRS), resident individuals can send outward remittances up to USD 2,50,000 or its equivalent per fiscal year.
The limit for carrying foreign currency in the form of currency notes while traveling abroad varies depending on the country. Traveller's are generally allowed to purchase foreign currency notes/coins up to USD 3000 or equivalent per visit. However, exceptions apply to countries such as Iraq, Libya, Iran, Russia, and other Commonwealth of Independent States where traveller's can draw foreign exchange in the form of notes and coins up to a specified limit. For example, traveller's going to countries such as the Islamic Republic of Iran, Russian Federation, and other Republics of Commonwealth of Independent States are allowed to carry foreign exchange up to USD 2,50,000 or equivalent in the form of foreign currency notes or coins. Moreover, those going for Hajj/Umrah pilgrimage may carry the full amount of entitlement (USD 250,000 or equivalent) in cash or up to the specified cash limit by the Haj Committee of India.
A resident Indian can take Indian rupee outside India (except to Nepal, Bhutan, Pakistan, and Bangladesh) as currency notes up to Rs. 25,000 per person. Indian residents traveling to Pakistan and/or Bangladesh can bring currency notes up to Rs. 10,000 per person.
RemitX has a team of experts and currency detecting machines that quickly identify fake or soiled notes. So when purchasing currency from RemitX, one can be assured that the notes are genuine.
When a person enters India from another country, they can bring foreign exchange without any restriction. However, if the total value of foreign exchange in the form of traveller's cheques, bank notes or currency notes exceeds USD 10,000 or its equivalent, and/or if the value of foreign currency notes alone is more than USD 5,000 or its equivalent, they must declare it to the Customs Authorities at the airport using the Currency Declaration Form (CDF) upon their arrival in India.
Foreign exchange can be purchased in cash for amounts below Rs. 50,000. For amounts exceeding Rs. 50,000, payment must be made through a crossed cheque, RTGS/NEFT drawn on the applicant's bank account.
Yes, multiple currencies and products can be added to the order cart on the RemitX portal and checked out in one transaction.
Unspent foreign exchange held in the form of currency notes and traveller's cheques must be surrendered within 180 days of returning from a foreign trip. It is allowed to keep foreign currency up to the amount of USD 2,000 in the form of traveller's cheques or notes.
A valid passport, PAN copy, current address proof, confirmed return air ticket, visa (if available), and form A2 are required for buying foreign currency.
Foreign exchange can be purchased up to 60 days in advance. Any foreign exchange that cannot be used within 60 days should be surrendered immediately.
A traveler heading to Iraq and Libya can purchase currency notes up to a maximum of USD 5,000 per year (totaling USD 250,000 or equivalent). For those traveling to Iran, the Russian Federation, and other Commonwealth of Independent States republics, the entire exchange (USD 250,000 or equivalent) can be in the form of currency notes.
Traveller's crossing the land borders to Pakistan, Bangladesh, or Myanmar are allowed to carry up to USD 250,000 or equivalent in currency per financial year. If a traveler exceeds the limit of USD 250,000 or equivalent in a financial year, they can approach the nearest Reserve Bank of India office and obtain approval to carry foreign exchange above the limit.
A Multicurrency Card is a specialized product for frequent travellers who need to carry different currencies for multiple destinations. It allows you to load various currencies on a single card and use it to withdraw local currency from over 2 million ATMs in more than 200 countries worldwide. Before your trip, it's advisable to check with your bank about overseas ATM transaction fees.
Prepaid Travel Cards offer several benefits, including access to over 34 million merchant establishments and 2 million ATMs, free replacement cards, global emergency toll-free assistance in over 80 countries, online access and controls, online usage, high levels of safety and security, and encashment options once you return from your trip.
Yes, it's recommended to opt for a Forex prepaid card when traveling abroad due to its safety, security, and convenience. It is widely accepted at over 2 million ATMs and millions of establishments worldwide.
Prepaid Forex cards are generally more cost-effective than debit cards, so it's advisable to compare bank charges for retail outlets and ATMs whenever possible.
Prepaid cards are generally available in all major currencies to meet your foreign travel needs, and you can load them onto a single card.
A Prepaid Forex card can be reloaded and is valid for 3 to 5 years. You can use the card multiple times within this period, and you can reload it through RemitX whenever you travel overseas.
Most Forex cards have a limit of USD 40 or equivalent on NFC (Near-Field Communication) transactions.
"Dynamic Currency Conversion" (DCC) allows overseas banks offering ATM or POS machine payment services in certain countries to offer you the option to be charged in Indian Rupees. However, this may result in significantly higher mark-up on the currency conversion. While safeguards are in place, it should be noted that if a transaction is approved under DCC, the customer will bear the exchange mark-up loss, and the card issuer cannot be held liable for DCC-related charges or refund such charges if the customer proceeds with DCC transaction and accepts the DCC charges at the ATM/POS machine.
To purchase or reload a Prepaid Forex Card from RemitX, you are required to submit the following documents, duly filled and signed:
- Card Application/Reload Form
- Self-attested copy of Passport (original Passport to be carried for verification)
- Self-attested copy of return Air Ticket and Visa (originals to be carried for verification)
- PAN Number mentioned on the Application Form with a self-attested copy of the same.
- Additional address proof if the address mentioned on the application form differs from the address mentioned on the Passport.
No, the Prepaid Forex card cannot be used in India.
The amount loaded or reloaded onto the card should comply with the regulations of RBI and FEMA. As per the Foreign Exchange Management Act, 1999, and current RBI regulations, the amount loaded onto the card can be determined.
|For Holidays, Personal visits etc.||USD $2,50,000 per financial year|
|Medical Treatment - For the person traveling abroad for treatment||USD $2,50,000 per financial year|
|Medical Treatment - For the person traveling abroad for treatment||USD $2,50,000 per financial year or amount as mentioned in the letter from overseas hospital / doctor|
|Studies Abroad - For the student pursuing studies abroad||Eligibility is USD $2,50,000 per financial as per RBI however it is restricted to amount as mentioned in university fees letter|
With RemitX, you have the option to keep your forex card and reload it before your next overseas trip, so that you can use it again when you return home.
You can only encash the balance on your forex card once you return to India. To claim your refund at the best rate, you will need to fill out the refund form and submit a copy of your passport along with it.
RemitX branches can refund the unutilized balance regardless of where the card was issued, provided that the last transaction on the card was made 10 days prior to the encashment date.
A blocked account also known as 'Sperrkonto' is a special account which needs to be opened, when you start your German Visa application process, from your home country. Needless to say, it is a prerequisite document of your Visa application process.
In order to, enter the Federal Republic of Germany, citizens from Non - European Countries need an entry visa. This visa will only be granted by the Foreign Office of the Federal Republic of Germany, if the intended traveller can prove sufficient funds for the duration of his stay in Germany. Proof of this is provided by presenting a blocked account. A blocked account is a special type of bank account for international students in Germany, to prove that they have enough financial resources to live in Germany for one year during their student visa application.
No, there are no exceptions in opening a RemitX blocked account. A blocked account is the only way of proving one's financial standing. There are many other ways to prove the financial stability, but it is better to check with the German consulate beforehand.
It is extremely important that you exercise caution when you open the bank account. A Blocked account is a proof of financial means provided to the Foreign Office of the Federal Republic of Germany. Therefore, it is very important for your blocked account to be accredited by the Foreign Office of the Federal Republic of Germany. Be aware that not all accounts are equally accepted by all authorities. Make sure that the provider you choose covers all your needs.
Security and acceptance should have a higher priority over saving a little amount of money on fees because, in the end, you could end up paying higher if things do not go as expected. Blocked accounts based on a fully licensed bank in Germany only provide full deposit protection and comprehensive acceptance. Also, it is very important for the Blocked account holder to understand the cost of funding for the blocked account and for refund if any in case of Visa refusal.
Below is the list of documents required to open a RemitX blocked account:
- Address Proof in India
- University Letter
- Recent passport size photo (colour)
- Passport copy (front & back side)
- PAN Card copy
At the moment, the presumed annual requirement that must be paid into the blocked account when applying for a visa amount to 11,208 Euros per year i.e. 934 Euros per month. Although, many students often choose to deposit more than the minimum amount required to increase their chances of getting their student visa approved.
Yes, RemitX charges one time set up fees of 89 Euros to set up a Blocked account.
Yes, you can. The amount of 11,208 Euros is only the minimum amount of money required for you to apply for your student visa. In case you need to deposit more than 11208 Euros, you can add maximum up to 1000 Euros as “additional basic sum” in your blocked account. It must be noted that the additional amount in “additional basic sum" will be disbursed to your savings in your first disbursement payment,
It takes just “Three steps” to open and operationalize your RemitX Blocked account. The Blocked account process is completely online with an end-to-end solution.
Unfortunately, you can't. Even if you're short on time, the bank cannot proceed faster with your application. Hence, it is always recommended to start your German Blocked account opening procedure as soon as possible.
If your visa application is rejected by the German embassy in your home country, the amount will be refunded. All you need to do is log on the GBA portal - Link and update your visa status as rejected, upload your visa rejection letter, and click on submit. RemitX will then refund the funds to your bank account held in India in INR as per the prevailing market rate post deductions. Note: Transfer fees, will be borne by the student.
RemitX blocked account is an end-to-end solution for students traveling to Germany. By choosing the RemitX blocked account, the process system helps you fund and manage your blocked account. RemitX strictly adheres to the rules and regulations of the student's home country - for example, In India it is mandatory that the funds are originated from the students OR from their blood relatives bank account only.
According to German regulations, third-party sponsorships for German blocked accounts are allowed. RemitX also allows third parties to fund a German blocked account in compliance with German regulations. In such cases, RemitX may request additional documents to verify the funding of the blocked account. The funding process is subject to the Know Your Customer (KYC) regulations of the student's home country.
RemitX blocked accounts are regulated by German laws and are opened in a German bank that is incorporated in Germany. Therefore, the German Deposit Guarantee Act applies to them. This Act guarantees deposits of up to €100,000 per depositor for retail clients, partnerships, and corporations.
Opening a RemitX blocked account is now easier than ever before. Simply go to gba.remitx.com and follow these steps:
- Click on "Products" and select "RemitX German Blocked Account."
- Create your blocked account online
- Register on the portal by providing basic information such as your email address and mobile number.
- Enter the One-Time Password (OTP) sent to your email address or mobile number and complete your personal details, uploading any requested documents.
- Foreign students must upload their passport copy, university letter, and a recent color passport size photograph. Indian students must upload their address proof in India, university letter, recent color passport size photograph, passport copy (front and back), and PAN card.
- Once your blocked account is created, the details will be sent to your registered email address.
To deposit funds into your blocked account:
- Log in to your account with your registered email address and click on "My Account". To deposit funds.
- Choose your preferred document verification option and proceed with your payment method. The portal provides options for funding of Blocked account as per the payee type and mode of payment.
- For education loans, you can transfer the "Payment Instruction" to your education loan provider by generating Form No. 5 (only available when the blocked account is funded via an education loan). Submit Form No. 5 and Form No. 4 (account opening confirmation) to your education loan provider for funding.
- Update the payment instruction in the portal to help the RemitX team track your funds.
- You will receive an email confirmation upon receipt of your funds.
- Upon receipt of funds, an email link will be sent to your registered email address within 24 working hours. You can download your RemitX blocked account confirmation from "My Account”. Alternately, log in to your account to download your RemitX Blocked amount confirmation from “My Account”.
You can only activate your blocked account upon your arrival in Germany. To activate your account, log in to your RemitX blocked account portal and upload the following documents:
- Visa copy received from the German embassy (if not already uploaded).
- Current bank account details held in Germany, including IBAN and BIC codes.
- Copy of your entry stamp in your passport
- Copy of your registration certificate (Meldebestätigung)
- Copy of certificate of enrolment (Immatrikulationsbescheinigung)
You can get a Meldebescheinigung at the local registry office (the “Bürgeramt”, the “Einwohnermeldeamt”, or the “Kreisverwaltungsreferat” if you're in Munich or KVR or Kundenzentrum depending on the region or city.
Get an appointment at any Bürgeramt for "Meldebescheinigung beantragen” and bring your personal ID, such as a passport, and payment. You can find the nearest registration office by entering your postcode on this website.
Meldebestätigung is often required for opening a bank account (with some exceptions) or obtaining a cell phone contract.
You receive an Anmeldebestätigung when you register your address in Berlin (this is called the Anmeldung). The document will be printed out and given to you during your appointment.
The Anmeldebestätigung confirms that you registered your address on a certain date. The Meldebescheinigung confirms that you are still registered at this address. You only receive the Anmeldebestätigung once, but you can request a Meldebescheinigung anytime you want.
You can register your address in Germany at the local registration office (Einwohnermeldeamt). It is recommended that you register your residence address within two weeks of your arrival in Germany. This is because the REMITX blocked account requires a copy of the registration confirmation (Meldebestätigung) so that you can open and activate your student current bank account and tax number. You can find the location of the closest registration office to your place of stay on this website https://umziehen.de/.
The basic documents required for registering your place of residence are:
- Registration form (Anmeldung)
- Valid passport
- Rental contract (Mietvertrag)
- Confirmation of residence from your landlord (Wohnungsgeberbestätigung)
The visa you receive from the German embassy in your home country is called a student visa or entry visa. All international students must convert their student visa into a study residence permit before their student visa expires. You can book an appointment online to apply for a residence permit at the Foreigner Office (Ausländerbehörde) website. On the appointment date, you will need to present all the required documents to the officer, and if everything is satisfactory, your residence permit (Aufenthaltstitel) will be provided in your passport.
The documents required for residence permit are:
- Passport with a valid student visa
- Certificate of statutory health insurance (Versicherungsbescheinigung)
- Biometric photograph
- Student ID / certificate of enrolment
- Blocked account amount certificate Form no 6.
- Registration confirmation (Meldebestätigung) from the registration office
- Rental agreement (Mietvertrag) with the landlord
- Application for a residence permit
The certificate of enrolment is documentary evidence that you are a student studying in Germany. It is also required for submission along with other documents when you visit the local registration office to register your place of stay.
The documents required for enrolment are:
- Personal identification card or passport
- Notification of admission
- University entrance qualification: the original or a certified copy with a certified translation in German
- Passport size photograph
- Confirmation of SHI coverage by a public health insurance provider in Germany.
After submitting all the required documents, you will receive a confirmation letter which serves as your temporary student ID. The student card (Student ID) and enrolment certificate (Immatrikulationsbescheinigung) will be sent to you via post after a few weeks.
Getting biometric photos taken in Germany is simple. There are two easy methods:
- At a FotoFix machine: Simply locate a FotoFix machine, insert 6€ in coins, and wait for a few seconds. The machine will print four copies of your passport photo a minute later. These biometric photos are accepted by most German offices that require documents, including visas, driving licenses, and passports.
- At the Bürgeramt / Ausländerbehörde: You can also find passport photo kiosks at the Bürgeramt. Find your Bürgeramt or Ausländerbehörde, then look for Fotoautomat on the information page. The machine will print four copies of your passport photo which are accepted by most German offices that require documents, including visas, driving licenses, and passports.
In Germany, health insurance is mandatory for all residents, including students. Most people in Germany have public health insurance, also known as statutory health insurance or Gesetzliche Krankenversicherung (GKV). After enrolling with a public insurance company, you will receive an insurance certificate (Versicherungsbescheinigung) which is necessary for the enrollment (Immatrikulation) process at the university.
In statutory health insurance, family members (non-working spouses and children) of the insured person are also insured for free. However, if your spouse is working, she must be insured separately.
Statutory health insurance (SHI) in Germany is based on a solidarity system. This means that the contributions (monthly premium payments) are based on income and not on risk. Statutory health insurance is suitable for everyone and provides the same services to all its members regardless of their contribution (premium). All basic medical necessities are covered.
SHI providers in Germany are required to offer an affordable tariff for students. However, once you switch to private health insurance, it can be challenging to switch back to government health insurance in the future. Many students from India are registered with public health insurance before arriving in Germany.
The health insurance premium is charged to the student on a monthly fee basis. The monthly fee is regularly due to be paid on the 15th of every month for the previous month. Thus, the premium for statutory health insurance is always paid in arrears.
TCS applies to the Liberalized Remittance Scheme (LRS) quota of resident individuals (including proprietary concerns), and will be collected once the amount exceeds ₹ 7 lakhs. Customers will have to pay 5% TCS on the transaction amount plus service charges and GST. In case of non-availability of PAN or Aadhaar, TCS will be charged at 10% on the transaction amount plus service charges and GST.
In the case of a loan for educational purposes obtained from any bank or financial institute registered under section 80E of the Income Tax Act, the concessional rate of TCS will be 0.5% on the amount exceeding Rs 7 lakhs.
For example, if you buy currency worth ₹ 10 lakhs, TCS will be applicable on ₹ 3 lakhs.
TCS will be collected from the traveller/remitter whose LRS is used for availing the Forex/Remittance.
Yes, TCS applies to Overseas Tour Packages, meaning any tour package that offers a visit to a Country or Countries or Territory or Territories outside India. Customers will have to pay 5% TCS on the transaction amount plus service charges and GST. In case of non-availability of PAN or Aadhaar, TCS will be charged at 10% on the transaction amount plus charges. There is no minimum threshold limit for tour operators to collect TCS on Overseas Tour packages.
For example, if a customer buys currency worth ₹ 3 lakhs, TCS will apply to ₹ 3 lakhs.
TCS applies to the amount exceeding ₹ 7 lakhs on the customer's current financial year’s LRS limit. The rate of TCS is 5% of the forex amount including service charges and GST. When the forex is procured through a loan obtained from any bank or financial institution registered under section 80E, the concessional rate of TCS will be 0.5% on the amount (exceeding ₹ 7 Lakhs). Below are a few scenarios to help understand better:
|Scenario||Forex purchased – period and amount||TCS Implication|
|Customer W||Purchases forex of ₹ 4,00,000 in September, 2022||No tax will be collected since TCS is applicable from October,2020 onwards|
|Customer X||Purchases forex of ₹ 4,00,000 up to September, 2022 and does one more transaction of ₹ 4,00,000 in October, 2022||5% tax will be collected on ₹ 1,00,000 (4 lakhs + 4 lakhs = 8 lakhs)|
|Customer C||Purchases forex of ₹ 10,00,000 in October, 2020||5% tax will be collected on ₹ 3,00,000 (₹ 10,00,000 - ₹ 7,00,000) i.e. ₹ 15,000|
|Customer Y||Purchases forex of ₹ 10,00,000 in September, 2022||5% tax will be collected 6,00,000 i.e. ₹ 30,000|
|Customer Z||Remits for the purpose of education through a loan obtained from a financial institute of ₹ 10,00,000.||0.5% TCS will be collected on ₹ 3,00,000 (₹ 10,00,000 - ₹ 7,00,000) i.e. ₹, 1500|
Customers whose current financial year’s LRS limit is below ₹7 lakhs and payments for foreign education originating from an education loan from a financial institution in India are subject to a lower 0.5% TCS. The following are exempt from TCS:
- The Central or State government
- An Embassy, a High Commission, legation, commission, consulate or trade representative of a foreign State and a club
- Local authority [as defined in explanation to section 10(20)]
- • Any other person as may be notified.
TCS is not an additional charge and can be adjusted against your total income tax liability and claimed while filing your personal income tax returns.
TCS will not be reversed once debited. Customers can approach the income tax authority for a refund by filing their personal income tax return.
The below documents are to be provided while doing the transaction online or must be handed over physically to our branch outlets:
- Education loan sanction letter with student/parent name
- Declaration on the LRS application from the client that the source is from a loan
- Bank statement showing the source of funds as an unutilized disbursed education loan from a financial institute
- Certificate issued by the Income Tax authority where the financial institution has been registered under section 80E
TCS does not apply to non-residents and foreign nationals.
The Canadian High Commission advises as follows:
Preferred option for proof of funds: Evidence of purchase of a special Guaranteed Investment Certificate (GIC) from a participating Canadian financial institution (bank), in the amount of $10,000 CAD to cover living expenses for your first year in Canada and evidence of payment for your first year’s tuition.
As an alternate option, one can fulfil the financial requirement by submitting a copy of the receipt for the first year’s tuition fee and a copy of an Educational Loan from an Indian Chartered Bank equivalent to $10,000 CAD.
The student must submit the following documents:
- Signed copy of the GIC Application Form
- Copy of passport (front & back)
- Copy of acceptance letter from a Canadian educational institution