Studying MBBS abroad has become more affordable for Indian students after a major announcement in Union Budget 2026. Finance Minister Nirmala Sitharaman has reduced the Tax Collected at Source (TCS) on overseas education remittances under the Liberalised Remittance Scheme (LRS) from 5% to 2%, providing immediate financial relief to students and parents.

This decision directly benefits students planning to pursue MBBS in Russia, Kazakhstan, Kyrgyzstan, Georgia, Tajikistan, Germany, and other countries, where large upfront payments are required for tuition fees, living expenses, and mandatory bank deposits.

How the TCS Reduction Helps MBBS Abroad Aspirants

Under the LRS, Indian residents can remit up to USD 250,000 per financial year for purposes such as education and medical treatment. Earlier, when families sent more than ₹10 lakh abroad, banks deducted 5% TCS upfront, increasing the immediate cash burden.

• Now, with TCS reduced to just 2%, the upfront deduction is much lower
• Less money gets blocked during university fee transfers
• Easier fund management during visa processing and admission stages

For MBBS aspirants, this is especially important because many foreign universities require students to show proof of funds or maintain blocked accounts before issuing offer letters or visas.

Big Advantage for MBBS Students Using Education Loans

A growing number of students are opting for education loans from public sector banks to fund their MBBS abroad journey. Government data shows a sharp rise in education loan disbursements in recent years.

With lower TCS:

• Bank-funded transfers become smoother
• Initial relocation costs become more manageable
• Parents face less financial pressure during the first year of study

This makes MBBS abroad with an education loan more practical and affordable than before.

What Is TCS and Is It an Extra Tax?

Tax Collected at Source (TCS) is collected by banks when money is sent abroad under LRS.

Important: TCS is not an extra tax.

• The amount collected can be adjusted against your income tax liability
• Any excess TCS paid is refunded while filing ITR

However, lower TCS means less money deducted upfront, which improves cash flow for families.

Why This Budget Update Matters for MBBS Abroad Admissions in 2026

• Lower upfront cost for MBBS admissions abroad
• Easier fee transfers to foreign universities
• Reduced financial stress during visa and admission process
• Encourages more students to pursue medical education overseas

This move is expected to boost MBBS admissions abroad in 2026, especially in popular destinations like Russia, Kazakhstan, Kyrgyzstan, Georgia, Uzbekistan, and Europe.

Planning MBBS Abroad in 2026?

With reduced TCS and improved affordability, this is the right time to start your MBBS abroad journey. Our expert counsellors help with:

• University selection
• Admission process
• Education loans
• Visa & documentation
• Post-arrival support

📞 Contact us today for FREE MBBS abroad counselling