Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Module: | MODULE A: INTERNATIONAL BANKING

Q65: Consider the following statements regarding the Tax Collected at Source (TCS) rates for remittances under the Liberalised Remittance Scheme for the Financial Year 2025-2026:

1. For remittances specifically for Overseas Education funded by a loan from a financial institution under Section 80E, the TCS rate is Nil (Zero).
2. For remittances for Medical Treatment funded by personal savings, the applicable TCS rate is 5 percent on the amount exceeding INR 10 Lakhs.
3. For remittances for Overseas Tour Packages, the TCS rate is 20 percent on the amount exceeding INR 10 Lakhs.

Which of the statements given above is or are correct?
A
1 and 2 only
B
1 and 3 only
C
2 and 3 only
D
1, 2, and 3
✅ Correct Answer: D
🎯 Quick Answer:
All statements (1, 2, and 3) are correct based on the active Finance Act 2025.
Concept Definition: TCS Rate Matrix (FY 2025-26). Structural Breakdown: Threshold Increase: The Finance Act 2025 raised the general LRS TCS exemption threshold from INR 7 Lakhs to INR 10,00,000 (10 Lakhs). Education (Loan-Funded): If the education is funded by a loan from a specified financial institution (Section 80E), the TCS rate is Nil (0 percent). Education (Self) and Medical: For amounts exceeding INR 10 Lakhs, the active rate is 5 percent.
Tour Packages: Up to INR 10 Lakhs attracts 5 percent; amounts exceeding INR 10 Lakhs attract 20 percent.
Other Purposes: Flat 20 percent on amounts exceeding INR 10 Lakhs.