US EditionBudget cuts tax collected at source for foreign tour packages to a uniform 2%
Finance Minister Nirmala Sitharaman reduced tax collection at source on overseas tour packages and Liberalised Remittance Scheme remittances to 2% to ease compliance and taxpayer burden.
- On February 1, 2026, Finance Minister Nirmala Sitharaman proposed reducing TCS under the Liberalised Remittance Scheme from 5% to 2% and cutting TCS on overseas tour programme packages to a uniform 2%.
- Presenting the Union Budget in Parliament on February 1, 2026, Nirmala Sitharaman, Union Finance Minister, proposed tax measures aimed at simplifying compliance and improving ease of living for taxpayers.
- Tax rules specify that the TCS threshold determines taxation eligibility, with TCS collected by sellers at sale and remitted to the government's account, referencing a ₹10 lakh threshold.
- Travelers and tour operators will face lower upfront withholding as Finance Minister proposed to simplify foreign travel transactions and affect government receipts through TCS collections.
- The Budget also raises education funding to Rs 1,39,289.48 lakh crore, 6.22% higher than last year, and proposes three new All India Institute of Medical Sciences plus 75,000 medical seats over five years.
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18 Articles
Times of India
The Economic TimesUnion Budget 2026: FM cuts TCS rate for education and medical expenses abroad under the Liberalised Remittance Scheme
The Union Budget 2026 offers significant relief for Indians. Overseas education and medical remittances under LRS will now face a reduced TCS of just 2%, down from 5%. Furthermore, businesses providing manpower services will benefit from simplified TDS rules, with payments now taxed at a straightforward 1% or 2% under contractor provisions.
Education Budget 2026: Education sector's allocation rises 6.22% to Rs 1.39 lakh crore
The education sector witnessed an increase in allocation this year's budget, Finance Minister Nirmala Sitharaman announced an allocation of Rs 1,39,289.48 lakh crore, which was 6.22 per cent higher than last year. Last year, a total of Rs 1,28,650 crore allocated to education sector. The budget has a special focus on higher education sector this year, the government has proposed setting up of three new All India Institute of Medical Sciences (A…
Finance Minister Nirmala Sitharaman announced major changes to the tax structure related to international travel, overseas education, and medical expenses in Budget 2026. The government has provided relief to travelers, students, and their families by reducing the TCS rates on foreign tour packages and remittances.
Budget 2026: International travel to get cheaper as tour package tax cut to 2%
Tabling her ninth consecutive Budget in Lok Sabha, Union Finance Minister Nirmala Sitharaman proposed a steep cut in tax collection at source (TCS) on overseas tour packages from the current 5 and 20 per cent to just 2%
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