Mumbai: The Regional Congress Committee (MRCC) has written to Union Finance Minister Nirmala Sitharaman regarding the tax collected at source (TCS) imposed on families sending education expenses to students studying abroad under the Liberalised Remittance Scheme (LRS) by the Reserve Bank of India.
Under current regulations, a 5% TCS is applied to transactions exceeding Rs 7,00,000. Varsha Gaikwad, President of MRCC, has requested a reduction in the TCS rate from the existing 5% to 2% and an increase in the transaction limit from Rs 7,00,000 to Rs 10,00,000.
Letter written by Gaikwad | FPJ
Gaikwad points out at lack of financial security among families
"It is essential to note that many families lack the financial security to pay for education expenses upfront. They often resort to pawning jewelry or mortgaging their houses to acquire the necessary funds," Gaikwad stated in the letter.
"Typically, a student requires Rs 25,00,000 for education abroad. For example, 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 explained. Gaikwad stated, "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."
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