What it costsWhere can ₹10 lakh, ₹25 lakh or ₹50 lakh take a couple abroad?
For two, land only: ₹10 lakh buys five to seven private nights done well in the Maldives, Bhutan, the Maasai Mara or Switzerland.
Answered · checked 30 October 2026
What is the TCS on foreign tour packages in 2026, and do you get it back?
The short answer
From 1 April 2026, TCS on an overseas tour package is a flat 2% of the price, whatever the amount. Before that it was 5% on the first ₹10 lakh in a financial year and 20% above. On a ₹20 lakh package that is ₹40,000 instead of ₹2.5 lakh. TCS is not a cost: it is tax credited to your PAN and adjusted or refunded when you file.
- From 1 April 2026
- 2% flat on tour packages, no threshold
- Until 31 March 2026
- 5% up to ₹10L, 20% above
- On a ₹20L package
- ₹40,000, was ₹2.5L
- LRS limit
- US$250,000 per person per year
- Getting it back
- Credit against tax, or refund via ITR
What changed in Budget 2026
The Union Budget 2026-27 cut TCS on the sale of an overseas tour programme package from 5% and 20% to 2%, with no threshold. The change sits in Section 394 of the Income-tax Act, 2025, as amended by the Finance Act, 2026, and applies from 1 April 2026. For a family spending ₹15 lakh to ₹40 lakh on a journey, it is the single largest change to the cash needed upfront in years.
Other remittances under the Liberalised Remittance Scheme work differently: no TCS until your LRS remittances cross ₹10 lakh in the financial year, then 20% on the excess for purposes other than education or medical treatment.
| How you pay | Before 1 April 2026 | From 1 April 2026 |
|---|---|---|
| Overseas tour package from an Indian seller | 5% up to ₹10L, 20% above | 2% on the whole amount |
| LRS remittance, e.g. a deposit wired to a hotel abroad | Nil up to ₹10L, 20% above | Nil up to ₹10L, 20% above |
| LRS remittance for education or medical treatment | 5% above ₹10L | 2% above ₹10L |
A ₹20 lakh journey, old rules and new
Take a couple's ₹20 lakh private journey bought as one overseas package, the first in the financial year, paid by one person with a PAN.
| Line | Before 1 April 2026 | From 1 April 2026 |
|---|---|---|
| Package price | ₹20,00,000 | ₹20,00,000 |
| TCS on the first ₹10L | ₹50,000 (5%) | ₹20,000 (2%) |
| TCS on the next ₹10L | ₹2,00,000 (20%) | ₹20,000 (2%) |
| Total TCS | ₹2,50,000 | ₹40,000 |
| Paid at booking | ₹22,50,000 | ₹20,40,000 |
| Recoverable when you file | All of it | All of it |
What counts as an overseas tour package
The law describes it as the sale of an overseas tour programme package that includes expenses for travel, hotel stay, boarding, lodging or similar. A journey sold by an Indian company as one priced package, hotels and transfers and experiences together, is the clear case, and the seller must collect the 2%.
Paying a hotel abroad directly by bank transfer is a remittance under LRS instead. International flights bought on their own are generally not treated as a tour package, but how a booking is structured matters, so confirm your own case with your chartered accountant.
TCS is a credit, not a cost
TCS collected is deposited against the payer's PAN and appears in the annual tax statement. When you file your income tax return it is set against your tax for the year, and any excess is refunded. The seller needs your PAN to collect it in your name, so decide before booking who in the family pays: the credit belongs to that person.
The LRS ceiling is US$250,000 per resident individual per financial year, minors included, and foreign exchange for private visits abroad sits within it however many trips you take.
This is general information, not tax advice; confirm with your chartered accountant.
Questions, answered
Also asked.
What is the TCS rate on foreign tour packages from 1 April 2026?
A flat 2% of the package price, with no threshold, under Section 394 of the Income-tax Act, 2025 as amended by the Finance Act, 2026. Until 31 March 2026 it was 5% on the first ₹10 lakh in a year and 20% above.
How much TCS is payable on a ₹20 lakh foreign tour package?
₹40,000 at 2% from 1 April 2026. Under the old rules the same package attracted ₹2.5 lakh: ₹50,000 on the first ₹10 lakh and ₹2 lakh on the next ₹10 lakh.
Is TCS on foreign travel refundable?
Yes, in effect. TCS is tax collected in advance against your PAN. It is set against your income tax when you file your return, and any amount above your liability is refunded.
Does TCS apply if I book flights separately?
International flights bought on their own are generally not treated as an overseas tour package. A hotel paid directly abroad is an LRS remittance, with no TCS until ₹10 lakh a year and 20% above. Confirm your structure with your chartered accountant.
What is the LRS limit for foreign travel?
US$250,000 per resident individual per financial year, April to March, including minors. Foreign exchange for private visits sits inside that limit, irrespective of the number of trips.
Do I need a PAN to buy a foreign tour package?
Yes. The seller collects TCS against your PAN so the credit reaches your tax account; it belongs to whoever pays. This is general information, not tax advice; confirm with your chartered accountant.
Keep reading
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What it costsHow do you choose a luxury travel planner in India for a trip abroad?
Choose an outbound planner, one that sends Indians abroad, who designs privately rather than selling group departures.
Visas and entryHow early should Indians apply for a Schengen visa in 2026, and what has changed?
Apply 8 to 12 weeks before you fly.
What it costsWhat does a luxury Switzerland trip from India really cost?
A private, properly luxurious Switzerland journey from India costs ₹9 lakh to ₹22 lakh or more for two for seven nights, land only: five-star lake and mountain hotels, first-class rail or a private driver, and the Glacier Express.