From Policy to Passport: New Foreign Education Policy

Opens Doors for Indian Students Overseas

The 2025-26 Union Budget created substantial changes for Indian students who want to study overseas. The Finance Minister of India introduced new fiscal policies that will transform the financing system for Indian students seeking overseas education. A significant change affects the Tax Collected at Source (TCS) rates which specifically apply to foreign remittances related to educational loans.

The well-considered change in policy will help reduce educational costs while expanding opportunities to pursue international education. Students who want to obtain student visa assistance or study in the UK find their dream much more accessible and affordable because of the recent changes in foreign education policy.

The Revised TCS Rates

Students who want to study abroad find direct benefits from the adjusted TCS rates. The new policy contains specific requirements for students who wish to study abroad.

• No TCS will be applied. Students along with their families can plan affordable necessary expenses without facing any additional tax burdens because of this policy provision.
• Educational loans from authorized financial institutions or approved charitable institutions under section 80E of the IT Act will not be subject to TCS taxation no matter what the amount exceeds.
• Educational loans outside Section 80E coverage along with all non-education purposes will continue to have their TCS rate set at 5% after exceeding Rs 7,00,000.

Education Loans Abroad

The positive impact of the changes in the foreign education policy will lead to an increase in the number of students applying for student loans or scholarships. A financial institution like the NBFC or an...