NRIs Sending Money Home for Durga Puja: What TCS and FEMA Rules Actually Apply

NRIs sending money to family in India for Durga Puja need to know the TCS and FEMA rules that apply. Full 2026 breakdown of thresholds and rates.

Sneha Das

9/24/20265 min read

The Festival Doesn't Stop at the Border, But the Tax Rules Do Apply

For thousands of NRI families with roots in Kolkata, Durga Puja means sending money home, for family shopping, donations to the local pandal, gifts for parents and siblings, or simply contributing to the household's festive budget. What a lot of NRIs genuinely don't realize is that this remittance, sent from a foreign bank account or by a resident relative on their behalf, may attract Tax Collected at Source (TCS) depending on how much and for what purpose. Here's exactly how the current rules work, updated for FY 2026-27.

Wait, TCS Applies to Family Remittances?

Here's an important distinction worth understanding first. TCS under the Liberalised Remittance Scheme (LRS) applies to remittances made by resident Indians sending money abroad, not to NRIs sending money into India. So if you're an NRI wiring money directly from your foreign account to family in Kolkata, TCS on that inward transfer generally doesn't apply to you directly.

Where this actually matters: if a resident family member in India (say, a parent or sibling) is remitting money out of India, perhaps to send festive gifts to relatives abroad, or is managing funds that eventually get used for cross-border transactions, LRS-linked TCS becomes relevant for them, not for you as the NRI sender. This distinction trips up a lot of families, so it's worth being precise about which direction of money movement actually attracts TCS.

Where TCS Genuinely Comes Into Play for Puja Season?

The relevant scenario for most families is when a resident Indian family member sends money abroad, whether to reciprocate, fund a family member's travel back for the puja, or handle related cross-border expenses. Here's where the current rules apply.

The ₹10 Lakh Aggregate Threshold

Under Section 206C(1G), effective from 1st April 2026, the first ₹10 lakh of a resident individual's total LRS remittances in a financial year, across all purposes and all banks combined, is entirely TCS-free. This is a single annual threshold per PAN, not per transaction, not per bank, and not per purpose category. Once total remittances cross ₹10 lakh, TCS kicks in on everything sent beyond that point.

Rates That Actually Apply From April 2026

The category that actually matters most for puja related remittances is the last row, gifts and family maintenance. Money a resident family member sends abroad, say, gifting cash to an NRI relative, or funding shared festive expenses, falls under this "other purposes" bucket, which still carries a steep 20% TCS rate above ₹10 lakh, this rate was not reduced in the recent Budget 2026 changes, only education, medical, and tour packages saw rate cuts.

A Worked Example

If a family in Kolkata sends ₹15 lakh abroad in a financial year as a gift or family support payment, the first ₹10 lakh is entirely TCS free. The remaining ₹5 lakh, taxed at 20%, means ₹1 lakh gets collected as TCS at the time of remittance.

Important to remember: TCS isn't a final tax, it's an advance collection. The amount collected shows up as a credit in the remitter's Form 26AS and can be claimed against their final tax liability, or refunded, when they file their ITR for that year.

What About Money NRIs Send Into India for Puja?

This is genuinely good news for most NRI families. Money remitted into India, for family expenses, puja donations, or gifts to relatives, doesn't attract TCS on the Indian side at all. The relevant considerations here instead involve the tax treatment on the receiving end:

Gifts to a specified relative (parents, siblings, spouse, and other categories under Section 56(2)(x)) remain entirely tax-exempt in the hands of the recipient, regardless of the amount.
Gifts to a non-relative, a friend, a cousin, or extended family outside the specified list, are tax-free only up to an aggregate ₹50,000 per financial year; cross that, and the entire amount becomes taxable in the recipient's hands, not just the excess.

A Quick Clarification: Does the Standard Deduction Apply Here?

Worth addressing directly, since it's a common point of confusion during any discussion of cross-border money transfers. The Standard Deduction under Section 16(ia) applies exclusively to salaried individuals and pensioners against their salary income. It has absolutely no connection to TCS on foreign remittances, LRS transactions, or gift taxation. TCS operates as a separate advance-tax collection mechanism entirely; it isn't reduced or offset by any salary related deduction, and it shouldn't be confused with income tax deductions that apply to a completely different category of income.

What NRI Families Should Actually Do This Season?

Clarify the direction of the transfer. Money coming into India from an NRI generally doesn't trigger TCS on the Indian side; money a resident sends abroad does, once it crosses ₹10 lakh aggregate for the year.
Track the ₹10 lakh threshold carefully. It's cumulative across all purposes and all banks for the financial year, not a fresh limit per transaction.
Confirm the specified-relative status if the transfer is framed as a gift, this determines whether it's tax-free in the recipient's hands regardless of amount, or capped at ₹50,000 for non-relatives.
Keep documentation for large transfers. Even tax-exempt gifts should be backed by clear records showing the donor, relationship, and purpose, useful if questions ever arise later.
Remember TCS is reclaimable, if TCS was deducted on an outward remittance, it can be adjusted against final tax liability or refunded through the ITR, it isn't money lost permanently.

Conclusion

Sending money home for Durga Puja from abroad genuinely doesn't attract TCS on the Indian side, that's the direction most NRI families are actually moving money in, and it's largely free of this particular tax concern. Where TCS genuinely matters is the reverse flow, when a resident family member sends money abroad, where the ₹10 lakh threshold and the 20% rate on gifts and family maintenance above that mark are worth understanding clearly before a large transfer catches anyone off guard. Either way, proper documentation keeps both sides of the family protected if questions ever come up later.

Frequently Asked Questions

Q1: Does TCS apply when an NRI sends money to family in India for Durga Puja?
A: Generally no, TCS under the LRS applies to outward remittances made by resident Indians, not to money NRIs send into India.

Q2: Is the ₹10 lakh TCS threshold per transaction or per year?
A: It's a single aggregate threshold per PAN, per financial year, across all purposes and banks combined, not a fresh limit for each transfer.

Q3: What TCS rate applies if a resident family member sends a large gift abroad for puja related expenses?
A: This falls under "gifts and other purposes," taxed at 20% on amounts above ₹10 lakh in the financial year, this rate wasn't reduced in Budget 2026.

Q4: Is money received from an NRI relative as a puja gift taxable in India?
A: If received from a specified relative, it's fully tax-exempt regardless of amount. From a non-relative, it's tax-free only up to ₹50,000 aggregate per year.

Q5: Can TCS deducted on an outward remittance be claimed back?
A: Yes, TCS is an advance tax collection, not a final charge, it can be adjusted against final tax liability or refunded when filing the ITR for that year.

Q6: Does the Standard Deduction reduce TCS on foreign remittances?
A: No, the Standard Deduction applies only to salaried income and has no relevance to TCS, which operates as a completely separate mechanism.

Sending or Receiving Money Across Borders This Festive Season? Get Your Compliance Right

Filing4u helps NRI families and their relatives in India understand TCS, gift taxation, and remittance documentation, so festive generosity never turns into an unexpected tax notice.