Budget 2026: Tax rates on foreign remittances slashed
The Union Budget 2026-27 keeps existing income tax slabs but rolls out the new Income Tax Act from April, promising simpler rules and forms.
Key updates include more time to revise returns (now till March 31 for a small fee), easier certificates for small taxpayers, and a big change in TCS rates: remittances under the Liberalized Remittance Scheme for education and medical purposes have been cut from 5% to 2%, overseas tour program packages — which earlier attracted 5% or 20% depending on the amount — have been standardized at 2%, while other LRS remittances remain subject to 20% TCS.
TDS on manpower services down to 1-2%
If you're working or planning to study/travel abroad, these changes could mean less paperwork and lower upfront costs.
Businesses get some relief too: TDS on manpower services is now down to 1-2%, MAT is set at 14%, and buybacks will be taxed as capital gains.
Customs tweaks—like longer duty deferral and five-year advance rulings—are designed to make life smoother for startups, MSMEs, and anyone dealing with imports or exports.
In short: the budget aims to make taxes less of a headache for young earners, students, and entrepreneurs alike.