Budget 2026: In the Union Budget 2026, the government has provided significant relief to those who spend abroad. The TCS levied on overseas spending has now been reduced. Tax experts say this will improve people’s cash flow and make it easier to study, treat, and travel abroad.
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TCS Reduced: In the Union Budget 2026, the government has provided significant relief to those spending abroad. The TCS (Tax Collected at Source) levied on overseas expenditure has been reduced. Tax experts say this will improve people’s cash flow and make it easier to study, treat, and travel abroad.
What has changed in TCS?
According to the budget proposals, the TCS on remittances under the Liberalized Remittance Scheme (LRS) for study and medical treatment abroad has been reduced. Now, remittances exceeding ₹10 lakh will attract only 2% TCS instead of 5%.
Those traveling abroad have also received significant relief. Overseas tour packages will now be taxed at a flat 2% TCS. Previously, it was 5%, and in some cases, up to 20%. Now, there will be no threshold limit.
What benefits will the common man have?
According to chartered accountant Prashant Thackeray, the reduction in TCS will immediately reduce the tax burden on individuals. Although TCS can be adjusted against income tax later, the higher rate resulted in money being stuck for longer periods. This particularly impacted families who send money for children’s education, medical treatment, or foreign travel. Lower TCS means that people will now have more cash on hand, making it easier to manage expenses.
Relief for Students and Patients
Tax expert Anita Basrur says this decision is extremely beneficial for the middle class. Previously, high TCS would create immediate financial pressure. The new system will ease liquidity issues, while the government will also receive a complete record of remittances. This change will directly reduce expenses for students studying abroad and families sending money for medical treatment.
Benefits the Travel Sector
Reducing TCS on overseas tour packages will make traveling abroad cheaper. This will also support the outbound travel, tourism, and hospitality sectors, which are currently in recovery mode after the pandemic.
Experts believe that the TCS reduction reflects the government’s taxpayer-friendly approach. This will simplify foreign transactions, maintain regulations, and reduce pressure on the common man’s pockets.
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