Sending ₹7L+ Abroad? Your TCS Bill Explained
When you send money abroad to your NRI child, the bank deducts TCS upfront from your pocket. This is not a final tax — you can claim it back — but knowing when it applies, and how much, saves you a nasty surprise.
The TCS on a ₹25L foreign transfer can buy a second-hand car in India — before you even get a refund.
Your overseas money transfer could cost you this much upfront in tax
Key Takeaways
Track your total foreign remittances each financial year — once you cross ₹7 lakh in a year, every subsequent transfer attracts 20% TCS until April 1.
File your ITR to claim the TCS back as a refund — TCS is only a tax collected in advance, not a permanent charge, and it appears in your Form 26AS automatically.
Ask your bank whether the transfer qualifies as an LRS remittance or an inter-account transfer to an NRO account — the tax treatment is completely different and can save you lakhs.
When you send money abroad to your NRI child, the bank deducts TCS upfront from your pocket. This is not a final tax — you can claim it back — but knowing when it applies, and how much, saves you a nasty surprise.
Here's what happened: Under LRS (Liberalised Remittance Scheme), transfers above ₹7 lakh per year to overseas accounts attract TCS — currently 20% for most purposes since October 2023.. Gifts sent to close relatives (including children) are tax-free for the receiver under Indian income tax law, but TCS is still deducted by your bank at the time of remittance.. If your NRI child has an NRO account in India (for Indian income), transferring funds there works differently and may not trigger LRS rules at all, depending on the transfer route..
What you should do: Track your total foreign remittances each financial year — once you cross ₹7 lakh in a year, every subsequent transfer attracts 20% TCS until April 1.. File your ITR to claim the TCS back as a refund — TCS is only a tax collected in advance, not a permanent charge, and it appears in your Form 26AS automatically.. Ask your bank whether the transfer qualifies as an LRS remittance or an inter-account transfer to an NRO account — the tax treatment is completely different and can save you lakhs..
If your NRI child has an NRO account linked to Indian income, transferring within India to that account avoids LRS TCS entirely — check with your CA before wiring money abroad.
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- [1]“Gifting money to an NRI child: how is TCS calculated under LRS, and can you claim a refund?” mint - money · 15 Jun 2026
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