Union Budget 2026: TCS on Foreign Education, Medical Travel Slashed to 2%

Finance Minister Nirmala Sitharaman announced that Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) will be reduced from 5% to 2% for money sent abroad for education and medical purposes.

Travel Spending Gets Relief Too

TCS on international tour packages has also been lowered from 5%–20% to 2%, with the government removing the minimum remittance threshold for such transactions. This change aims to reduce upfront tax costs when individuals remit money abroad.

What Is TCS on Foreign Remittance?

TCS is a tax collected by banks or authorised dealers when money is sent overseas. It applies to:

• Higher education abroad
• Medical treatment abroad
• Living expenses for family members overseas
• International investments
• Travel and overseas tour packages

The collected TCS is not an extra tax. It is adjusted against an individual’s total income tax liability when filing returns, and any excess can be refunded.

Read more: Union Budget 2026: Who Are the Key Officials Working Behind the Scenes?

Conclusion

The Budget 2026 move provides a welcome relief for Indians spending abroad on education, healthcare, and travel, reducing upfront tax burden and simplifying international remittances.

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