India Budget 2026: TCS Cuts on Overseas Tours, Education & Medical Remittances

India Budget 2026: Lower TCS on Overseas Tour, Education & Medical Remittances

The Union Budget 2026-27 announced a major tax relief aimed at reducing the upfront cash outgo for Indians sending money abroad for travel, education, and medical needs. These changes apply to remittances under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), offering significant financial easing for students, families, and travellers.

What’s New in TCS for Overseas Travel?

Under the new budget, Tax Collected at Source (TCS) on the sale of overseas tour packages will be reduced to a flat 2% rate, removing the previous tiered system where:

• Up to ₹10 lakh – 5% TCS applied

• Above ₹10 lakh – 20% TCS applied

The simplified 2% flat rate has no minimum threshold, making international travel more affordable across all spending levels.

This move aims to ease the upfront financial burden on travellers, especially those booking high-value international packages that previously attracted much higher TCS. Also Read Here: Economic Times

Reduced TCS for Education & Medical Remittances

The budget also lowered the TCS rate on remittances for education and medical treatment abroad from 5% to 2% under the Liberalised Remittance Scheme (LRS). This change benefits Indian students and families sending funds overseas for tuition or healthcare needs.

Existing rules still apply that TCS may be triggered when remittances exceed ₹10 lakh in a financial year, but the reduced rate means less upfront tax cost for essential international expenses.

Why This Matters for Travellers & Students

Lowering TCS on foreign tour packages and remittances directly affects cash flow for Indian households planning overseas trips, education, or medical care:

• Students and families save on upfront costs when sending funds abroad.

• Tourists face less tax shock when booking international travel packages.

• Healthcare remittances become slightly more affordable for those seeking treatment overseas.

Economists and travel industry experts have welcomed the move as progressive and taxpayer-friendly, though some argue that further relief — such as a complete TCS exemption on certain remittances — could benefit students and families even more.