HSBC India Introduces New Service for Paying Foreign Education Expenses

HSBC India Introduces New Service for Paying Foreign Education Expenses

HSBC India has launched a new global education payments service designed to simplify the process for parents paying for their child's overseas education. This service allows customers to transfer funds directly to international universities using the HSBC India mobile banking app.

With the demand for overseas education rising among affluent Indian families, an HSBC study reveals that 78 percent of high-net-worth parents either plan to send their children abroad or already have children studying overseas. The new service enables users to wire funds to the pre-verified accounts of universities. Customers can input student details, securely upload loan documents, and make payments efficiently.

The service facilitates direct payments to over 600 universities in five countries including the United States, United Kingdom, Canada, Hong Kong, and Australia. Payments can cover various expenses such as tuition fees, accommodation, healthcare, insurance, and other university-related costs. Transfers typically take one to five working days to process.

All payments adhere to the Liberalised Remittance Scheme (LRS) limits set by Indian regulations, which allow a maximum of $250,000 per financial year for foreign education expenses. This limit encompasses tuition, living costs, books, travel, and insurance. Students can also utilize this facility to apply for loans, keeping in mind that overseas education loans incur a tax collected at source (TCS) of 0.5 percent, per the amended tax rules for 2023. For educational remittances exceeding Rs 7 lakh, the TCS rate is set at 5 percent. Customers can claim credit for TCS in their income tax returns.

HSBC does not charge fees for money transfers; however, applicable taxes may depend on the recipient's currency and country. Customers can view an estimate of these taxes while making the transfer.