TCS on foreign remittances, tour packages reduced: What it means
Planning a trip abroad or sending money for studies just got lighter on your wallet.
The government has reduced the Tax Collection at Source (TCS) on overseas tour packages to a flat 2% without any stipulation of amount, and on certain remittances from 5% to a flat 2% while raising the TCS exemption threshold for such remittances to ₹10 lakh, making international plans a bit more affordable.
For all-in-one travel packages
If you're booking an all-in-one travel package—flights, hotels, food—the TCS is now just 2% without any stipulation of amount.
This replaces the old tiered tax rates and means less upfront tax when you pay your travel operator.
For overseas education and medical expenses
Under the Liberalized Remittance Scheme (LRS), you can send up to $2,50,000 per year.
For education or medical expenses above ₹10 lakh, TCS is now down to 2%. But if it's for anything else (like investments), the higher 20% rate still applies.
The exemption limit was also bumped up recently, so you can send more before hitting these taxes.