Every year, thousands of Indian parents send anywhere from ₹50 lakh to ₹3 crore abroad for their child's education — and most lose ₹2-10 lakh of it without ever knowing why. My son leaves for the University of Illinois in a few weeks, and I almost became one of them!
My son leaves for University of Illinois, US in a few weeks. Like thousands of parents sending a child overseas, one of the key tasks at hand is to pay his tuition fees. Given we had the money available in our bank, I assumed this would be a five-minutes task:
- Log into the bank’s app
- Enter beneficiary details
- Pay and be done with it.
Instead, what I discovered was that a USD 75,000 transfer could potentially cost me more than ₹2 lakh in taxes and fees, depending on how I structured the transaction
Same day!
Same amount!
Same recipient!
The only difference being how I transferred the money. And no, this wasn’t just about selecting the cheapest FX provider. The deeper I dug, the more I realized that most families funding overseas education are not just losing money on exchange rates—they're navigating one of the most fragmented financial journeys in India.
A USD 75,000 transfer isn't just a transfer.
- It's an RBI transaction.
- A FEMA transaction.
- It’s a Tax-compliance transaction.
- A foreign exchange transaction.
And somewhere in between, three or four different institutions each take responsibility for one small piece of the process. Nobody owns the entire journey.
That's why every Google search leaves you more confused than when you started. One article explains the Liberalized Remittance Scheme (LRS), another explains Tax Collected at Source (TCS), YouTube videos compare forex providers, banks ask for Forms 15CA and 15CB—and then, of course, Reddit advice from strangers tells you why it may be better to study in India.
None of them are technically wrong. They're simply answering different questions.
The real problem
Here's what surprised me - The average U.S. undergraduate degree now costs between USD 300,000 and USD 400,000 over four years. At today's exchange rates, that's roughly ₹2.8–3.8 crore.
Now imagine making decisions on that amount based on half-understood WhatsApp forwards. Even a seemingly harmless 1% difference in foreign exchange pricing can quietly cost a family ₹3 lakh or more over four years.
Increase that to 2–3%, and you're suddenly talking about ₹6–10 lakh.
Not because tuition became more expensive or because the taxes increased.
Simply because nobody explained how to move the money efficiently.
Why is this so confusing?
Because everyone looks at the problem through their own lens.
Your banker focuses on banking. Your CA focuses on tax compliance. An FX provider focuses on currency conversion. RBI regulations focus on whether money can move. Each is doing their job.
But nobody is answering the question every parent actually has:
"What is the smartest, safest and most cost-effective way to get my money from here to my child's account?"
That's the question I wanted answered. So, I decided to answer it myself.
Where does your money actually go?
I could write a full monologue explaining FEMA, RBI regulations, foreign exchange spreads, tax compliance and all the entities involved in a cross-border transfer. But I don't believe that is the best use of your time—or that understanding overseas money movement should require a degree in finance.
Instead, let me show you a simple illustration of how the money moves and where the costs can accumulate.
The right way to transfer
If your child is heading abroad for study or work, there's a clean, well-trodden path for gifting them money before they leave — and a much costlier one if the sequencing goes wrong. Here's the process, in order.
Create a gift deed for the amount you intend to transfer to your child. Get the document properly executed and retain it along with the relevant bank records — this becomes your source-of-funds proof later. We've made the format we used available free of charge — write to info@unbordered.in to request it.
Transfer the gifted amount from your Indian savings account to your child's Indian savings account — while it is still a resident account. Doing this before any NRI conversion keeps it a straightforward resident-to-resident transfer, with no LRS or TCS involved.
Find a bank offering competitive FX pricing and low or zero transfer fees for the eventual overseas leg. For my own transfer, I found AU Bank was offering zero markup and zero charges on international money transfers at the time. Disclosure: We have no partnership with AU Bank and receive no commission or fees from them. This is included purely as a research example, and offers may change over time.
Once your child's status changes to NRI, convert their existing resident account to the appropriate NRI account type(s). The two primary types are NRO (Non-Resident Ordinary) and NRE (Non-Resident External). For this transaction, I opened both accounts for my son — the differences, and when to use each, are worth a separate article on their own. Because the gift already landed in step 2, this conversion doesn't move any money — it simply relabels the account the funds are already sitting in.
Work with your CA to file Forms 145 and 146 under the Income Tax Act, 2025 (these replaced the earlier Forms 15CA and 15CB). This is the compliance step your bank will require before releasing funds out of the NRO account.
Ask your bank to move the funds from the NRO account to the NRE account. The bank will likely ask you to establish the source of funds — this is exactly what the gift deed and bank statement from step 1 and step 2 are for.
Once the funds are in the NRE account, they're freely repatriable, subject to applicable FEMA rules and your bank's documentation requirements and can be remitted overseas without TCS.
| This isn't tax advice specific to your situation — confirm the details with your CA before initiating any transfer. But the sequencing above is the difference between a straightforward gift and an avoidable compliance headache. |
Why I'm writing this
I'm simply a parent who refused to accept- "That's just how international transfers work."
The more I researched, the more I realized something bigger. Global Indians don't have an information problem. They have a translation problem.
The regulations already exist. The guidance is scattered across RBI circulars, Income Tax provisions, bank operating manuals and hundreds of conflicting articles.
Nobody has connected the dots and that’s exactly why I am building Unbordered.
Not another remittance app.
Not another tax website.
But a place where Global Indians can finally understand cross-border finance without becoming experts in banking regulations.
Because if three weeks of research can save one family several lakh rupees over the course of a child's education, that's research worth sharing. And that's exactly what we intend to do.
If you want to stay tuned and read more Unbordered Insights on cross-border finance, personal finance and the decisions that matter to Global Indians by joining our waitlist.
