If a parent cannot establish that the fund is being sent to his or her child's overseas education, then the money will be transferred for the 'other purpose' and a hefty TCS of 20 per cent will apply, Jalan said. The bank then debits it from the account and remits it abroad.

To send money abroad under LRS, one has to go to the bank, fill up A-2 form and specify the purpose of the remittance and sign the declaration form. But those who live in flats outside the campus or shared apartments or rented accommodations might find it difficult to establish the education link, Jalan added. Then, a TCS of 5 per cent will be applicable if the remittances are above Rs 7 lakh,' said Vivek Jalan, Tax Connect Advisory. 'If your child stays in the hostel of the university, you can establish that it is for the educational purpose. The money transferred for hostel expenses or tuition fees can be easily shown.

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The Change by Remittance Girl