How Much Money Can Parents Send to Kids Abroad?

Date: 23rd January 2025 | Read time: 2 Minutes

Supporting children studying abroad often involves regular financial assistance for tuition, living expenses, and other necessities. Even though parents want to ensure their kids are well-supported, they must also know the rules and regulations governing international money transfers from India. The blog explores how much money parents can send to their children studying overseas and what considerations are crucial for such transactions.

The Reserve Bank of India (RBI) controls outward remittances under the Liberalized Remittance Scheme (LRS). According to this scheme, Indian citizens are allowed to send up to USD 2,50,000 per financial year for purposes like education and maintaining relatives abroad. This amount is for every individual and includes all types of remittances.

Minimum Amount

The minimum amount that parents can send through AU Remit—AU Small Finance Bank's dedicated online remittance platform—is USD 50 or its equivalent in other currencies.

Maximum Amount

• Online Transactions: Parents can send up to USD 75,000 or its equivalent per transaction using the AU Remit web portal.
• Higher Transfers: For amounts exceeding USD 75,000, parents need to visit their nearest forex-enabled AU Small Finance Bank branch to complete the transaction.

It’s important to note that there are no limitations on the number of transactions, so long as the total does not exceed USD 2,50,000 in a year.

AU Small Finance Bank provides a secure as well as user-friendly platform to transfer international money. Here are some benefits in brief:

1. Convenience: Online remittances can be initiated from your home comfort.

2. Competitive Exchange Rates - Attractive foreign exchange rates for all your remittances.

3. Quick Processing - Efficiently processed transfers to ensure timely support to your child.

4. Dedicated Support - Expert guidance on high-value transactions in the forex-enabled branches.

1. Ensure the purpose is legitimate, be it tuition fees, rent, or even living expenses; prepare documentation as necessary, such as admission letters or fee invoices, for check-up against the compliant list.

2. Declarations and supporting documents may be requested by the bank if a large transaction has occurred: prepare proof of funds and other documentary requirements.

3. Also observe the forex rate to have the best value for your remittance.

4. Bank Charges: The fee levied by the banks on remittances depends on the quantum and the medium of remittance.

5. Tax Implications: Under the Liberalized Remittance Scheme (LRS), remittances for education are subject to Tax Collected at Source (TCS). If the customer is transferring their own funds, no TCS is applicable for amounts up to ₹7 lakh. However, for remittances exceeding ₹7 lakh, a 5% TCS is levied.

In cases where the remittance is made using an education loan, the TCS rate is reduced to 0.5% for amounts above ₹7 lakh. It’s recommended to consult a financial advisor for clarity on the latest regulations.

Parents can send financial support to their children abroad with ease, thanks to RBI’s Liberalized Remittance Scheme and convenient platforms like AU Remit. With a maximum transaction limit of USD 75,000 online and an annual limit of USD 2,50,000, there is ample flexibility to meet diverse financial needs. By leveraging AU Small Finance Bank’s reliable remittance services, parents can ensure that their children’s international education journey is smooth and stress-free.

Visit the nearest AU Small Finance Bank or access the web portal of AU Remit to learn more and seek help in remittance services.