If you were planning an overseas trip, the Union Budget 2026 has brought welcome relief for travellers. In the budget presented by Finance Minister Nirmala Sitharaman on Sunday, it was announced that the Tax Collected at Source (TCS) on international tour packages has been reduced to a flat 2%, easing the cost burden on travellers. Here’s all you need to know.
International Travel To Get Cheaper After Tax Cut On Tour Packages
According to NDTV, in the Union Budget 2026, the Finance Minister announced that TCS on international tour packages will be reduced to a flat 2%, from the existing 5% and 20% slabs. This move will not only make international holidays cheaper and more accessible to a wider segment of travellers, but will also simplify the process of booking overseas trips.
Also, there will also be no minimum transaction limit under the new rule. This means whether you are booking a luxury vacation or a budget backpacking trip, a flat 2% TCS will apply to all international tour packages. For better understanding, currently, travellers pay a 5% TCS on overseas tour packages costing up to ₹10 lakh, while spending beyond this threshold costs them a much higher TCS of 20%. The tax applies to expenses such as travel, hotel stays, boarding, lodging and other related costs, NDTV reported. With the new announcement, a uniform 2% TCS will be levied across all amounts.
Also Read: Union Budget 2026: Astro Tourism To Bird-Watching Trails,10 Big Changes For India’s Tourism
More Relief Under The Liberalised Remittance Scheme
According to an India Today report, the Union Budget 2026 also includes a reduction in TCS under the Liberalised Remittance Scheme (LRS). Finance Minister Nirmala Sitharaman announced that TCS on remittances made for education and medical purposes will be reduced to 2%, down from the current 5%. The lower rate will apply to remittances exceeding ₹10 lakh in these categories.
Also Read: Union Budget 2026: India To Get 7 New High-Speed Rail Corridors Between THESE Cities
We hope this information was helpful to you all and will help you plan your next trip better!
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