Mumbai Congress chief Varsha Gaikwad has written to Union Finance Minister Nirmala Sitharaman concerning 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.
As per the current regulations, a 5 per cent TCS is levied on transactions exceeding Rs 7,00,000. Varsha Gaikwad, former Maharashtra minister, has requested to reduce the TCS rate from the existing 5 per cent to 2 per cent and an increase in the transaction limit from Rs 7,00,000 to Rs 10,00,000.
"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 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."
"Therefore, I request you to consider revising the TCS bracket from 5 per cent to 2 per cent and increasing the transaction limit from Rs 7,00,000 to Rs 12,00,000. Such a revision 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 in the letter.
"I am confident that you will give due consideration to my reasonable request and take the necessary action to ensure a better future for our students," the letter further read.