Emails that are not meant for me: Update on Tax Collected at Source (TCS)

Monday, 20 April 2026

Update on Tax Collected at Source (TCS)

TCS rates reduced from 5% to 2%

For education/medical payments

Dear Saurabh Kumar,

As per the Union Budget 2026, the Tax Collected at Source (TCS) on remittances for the purpose of medical treatment/ education (other than financed by a Loan) under the Liberalised Remittance Scheme (LRS) of the RBI has been reduced from 5% to 2% above value of ₹ 10 lakh.

The changes will be applicable from Apr 01, 2026. Please refer to below table for the TCS applicable:

Sr. No.	Nature of payment	Prior to April 01, 2026	Revision w.e.f. April 01, 2026
1	Remittance for education financed by a loan	No TCS applicable	No TCS applicable
2	Remittance for medical treatment / education (other than financed by a loan)	Nil up to ₹10 lakh; 5% above ₹10 lakh	Nil up to ₹10 lakh; 2% above ₹10 lakh
3	Remittance for other purposes	Nil up to ₹10 lakh; 20% above ₹10 lakh	Nil up to ₹10 lakh; 20% above ₹10 lakh

Note:

TCS will not be applicable for LRS transactions wherein the source of funds is Education Loan. TCS will be applicable on remittances for other purposes under LRS.
In accordance with the relevant provisions of Income Tax laws, it is mandatory to link PAN with Aadhaar. If PAN is not linked with Aadhaar, the PAN will become inoperative and TCS will be charged at the higher rate as per relevant Income Tax laws.

This communication does not constitute any tax advice. Please contact a professional for assistance regarding these changes.

Sincerely,
Team ICICI Bank

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