Money Abroad Tax IndiaWhen no tax is collected
Section 394 of the Income-tax Act, 2025 lists these exceptions to tax collected at source on remittances and tour packages (read on 13 November 2026):
- Education loans: no collection on a remittance that is a loan from a financial institution for pursuing education (394(4)(b)).
- Tax already collected on a package: no collection by the bank on an amount on which the seller of the overseas tour package has collected tax (394(4)(a)).
- Tax deducted by the buyer: no collection by the bank or seller if the buyer is liable to deduct tax at source under another provision of the Act and has deducted it (394(5)).
- Lower-rate certificate: the buyer may apply to the Assessing Officer, who may issue a certificate for collection at a lower rate if the total income justifies it (395(3)); the collector then collects at the certified rate until it expires.
- Up to ₹10 lakh: remittances under the scheme are not collected on until the year’s total passes ₹10 lakh.
Common questions
Is an education loan from a bank taxed?
No. Section 394(4)(b): the authorised dealer does not collect when the amount remitted is a loan from a financial institution, as defined in section 129(3)(b), for the purpose of pursuing education.
Source
- The Income-tax Act, 2025, as published in the Gazette of India Extraordinary: section 394 (tax collection at source, Table serials 7 and 8 and sub-sections (4) and (5)) and section 395(3) (certificate for collection at a lower rate). The enacted text was read on 13 November 2026.
Rules read on 13 November 2026 from the Income-tax Act, 2025. The Act may have been amended since it was enacted. This site is independent, not connected with the Income Tax Department or any bank, and gives arithmetic, not tax advice or foreign exchange advice. Your bank collects the tax: ask it.