Module: General Practice
Q43: Scenario: Mr. Sharma, a resident Indian, wishes to remit INR 15 Lakhs in FY 2025-26 for two different purposes:
Case A: Gift to a relative abroad.
Case B: Education fees abroad, funded entirely by an education loan from SBI (Section 80E).
Based on the Budget 2025 amendments (Effective April 1, 2025), what is the applicable Tax Collected at Source (TCS)?
Case B: Education fees abroad, funded entirely by an education loan from SBI (Section 80E).
Based on the Budget 2025 amendments (Effective April 1, 2025), what is the applicable Tax Collected at Source (TCS)?
✅ Correct Answer: B
New Rules (Effective April 1, 2025): The TCS threshold was raised from ₹7 Lakh to ₹10 Lakh.
For Education Loans (Section 80E): The TCS rate is now NIL (previously 0.5% > 7L). This is a major relief for students.
For "Other Purposes" (Gifts/Investments): The rate is 20% on the amount exceeding ₹10 Lakhs (previously exceeding 7L). Calculation for Case A: 15L - 10L = 5L Excess.
TCS = 20% of 5L = ₹1 Lakh.
For Overseas Tour Packages: 5% up to 10L, 20% above 10L.
For Education Loans (Section 80E): The TCS rate is now NIL (previously 0.5% > 7L). This is a major relief for students.
For "Other Purposes" (Gifts/Investments): The rate is 20% on the amount exceeding ₹10 Lakhs (previously exceeding 7L). Calculation for Case A: 15L - 10L = 5L Excess.
TCS = 20% of 5L = ₹1 Lakh.
For Overseas Tour Packages: 5% up to 10L, 20% above 10L.