S1107 Purpose Code: Education (e.g. fees for correspondence courses abroad)

Purpose code S1107 is used when a resident individual pays a foreign educational institution or platform for education fees, including correspondence or distance learning courses abroad.

What is the S1107 purpose code?

Purpose code S1107 is used when a resident individual sends money abroad to pay education fees to a foreign institution, including correspondence or distance learning courses. It covers payments such as tuition, registration charges and mandatory course-related fees billed by an overseas university, college or online education provider. It does not apply to business training or corporate consulting services, which fall under the relevant professional or technical service purpose codes. Under RBI FEMA guidelines, this outward payment is classified under personal, cultural and recreational services and reported accordingly.

When to use S1107 purpose code?

Use S1107 when you are paying an overseas university, college or recognised education provider for tuition or course fees under a correspondence or distance learning programme, within your USD 250,000 annual Liberalised Remittance Scheme limit. It is the correct RBI purpose code for personal education expenses paid by a resident individual to a foreign institution, irrespective of whether the programme is fully online or partly on campus. S1107 covers the education fee itself, not any separate professional services or consulting the institution may offer.

When to use a different code:

• Use the education travel code when the payment is primarily for travel and stay related to studies abroad
• Use the general education services code when the payment is for other non correspondence education services
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1107 purpose code?

Resident individuals who pay foreign universities, colleges or online education platforms for correspondence or distance learning courses use S1107 under the Liberalised Remittance Scheme, subject to the USD 250,000 annual limit. Parents or guardians in India may also use this code when remitting such course fees on behalf of their dependent students.

Examples of transactions covered

• Semester fees paid to an overseas university for a distance learning MBA programme
• Tuition payment to a foreign college for an online certification course in data science
• Annual subscription fee to an international e-learning platform for an accredited correspondence degree
• Registration and examination fees remitted to a foreign institution for a remote professional course

When NOT to use S1107 purpose code

• The payment is mainly for travel, accommodation or living expenses related to education abroad (use the relevant travel or maintenance purpose code instead)
• The payment is for a corporate training programme or business workshop organised by an overseas firm (use the applicable professional or training services purpose code instead)
• The payment is for purchasing books, software or other educational materials rather than course fees (use the appropriate goods or service import purpose code instead)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S1107, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1107 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Receive the fee demand: Your overseas university, college or online platform issues a fee invoice or statement clearly describing the course and amount payable.
2. Check your LRS limit: Confirm that your total outward remittances under the Liberalised Remittance Scheme, including this payment, stay within the USD 250,000 annual limit.
3. File Form 145: Submit the declaration before remitting, with Form 146 from your CA where the taxable amount exceeds ₹5 lakh in the Tax Year.
4. Complete Form A2: State the purpose of the outward remittance as S1107 and submit the supporting documents to your bank.
5. Get your MT103: Once the payment is sent, request the SWIFT MT103 as proof and retain your Form A2 and LRS records.

Common mistakes to avoid

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Tagging the wrong education code: Using S1107 for non correspondence education, travel or maintenance when another specific education or travel code fits better.
2. Code and invoice mismatch: The code not matching what the foreign institution's invoice describes, which can flag or delay the payment.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not clearly within the specified exempt list, which can attract a ₹1,00,000 penalty per instance.
4. Incomplete documents: Missing admission letter, fee demand, LRS declaration or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete verification with your bank stops the remittance from going through.
6. Exceeding the LRS limit: Ignoring your cumulative outward remittances under LRS for the year and attempting a payment that breaches the USD 250,000 cap.

How Skydo helps Indian businesses with cross-border payments

S1107 covers personal remittances under the Liberalised Remittance Scheme, which sit outside the PA-CB framework and which Skydo does not process. If you also invoice foreign clients or pay overseas vendors, here is where Skydo fits.

1. Complete onboarding: Share PAN, Aadhaar and business details. Setup is fully online and takes about five minutes.
2. Get virtual account details: Receive from international clients in USD, GBP, EUR and other currencies they already pay in.
3. Pay your overseas vendors: Send payments to foreign suppliers, software platforms and service providers under Skydo's outward approval.
4. Documentation in one place: Your invoices, remittance records and payment proofs stay together for your CA and your AD bank.
5. A rate you can see: The live mid-market rate with a transparent fee, instead of a markup hidden inside the bank's rate.