Definition
Advance income tax collected by the seller when you buy an overseas tour package or send money abroad under LRS. Since 1 April 2026, overseas tour packages attract 2% TCS from the first rupee. It is not a final cost: you claim it in your ITR.
Current TCS rates (FY 2026-27)
The Union Budget 2026 simplified TCS on travel. At the time of review:
| What you pay for | TCS |
|---|---|
| Overseas tour package from a tour operator | 2% of the full amount, no threshold |
| Forex for your own trip and other LRS remittances | Nil up to ₹10 lakh a year, 20% above |
| Education or medical treatment abroad | Nil up to ₹10 lakh a year, 2% above |
| Business travel paid by your employer | Not under LRS, no TCS |
The ₹10 lakh threshold is per person per financial year, across your LRS remittances. Before 1 April 2026, tour packages attracted 5% up to ₹10 lakh and 20% above, so older articles quoting those rates are out of date.
Example
A Delhi family books a ₹6 lakh Europe package with flights. The operator collects 2% TCS, about ₹12,000, and issues a TCS certificate. The amount appears in the payer's Form 26AS and Annual Information Statement and is claimed when filing the ITR. If the payer's tax liability is lower, the difference is refunded.
If the family books hotels themselves and loads ₹3 lakh on a forex card, no TCS applies, because they are under the ₹10 lakh threshold.
Practical advice
- Pay from the account of the person who will claim the credit, and give that person's PAN.
- Without a valid, Aadhaar-linked PAN, a higher rate applies.
- Salaried travellers can ask their employer to adjust TCS against monthly TDS.
- Non-filers must file an ITR to get the money back.
TCS is separate from GST on tour packages. Our foreign exchange desk can walk you through the numbers before you pay.