India’s Union Budget 2026 delivered a major relief for outbound travellers and families funding education or medical treatment abroad. Finance Minister Nirmala Sitharaman announced that Tax Collected at Source (TCS) on overseas tour packages will fall to a flat 2 per cent, replacing the two-tier structure of 5 per cent (below ₹7 lakh) and 20 per cent (above ₹7 lakh) introduced last year. The 2 per cent rate will also apply to outward remittances for education and healthcare under the Liberalised Remittance Scheme (LRS).
The decision is a direct response to industry feedback that the sharp 20 per cent rate, though refundable, had locked up working capital for middle-class families and small businesses. Travel agencies reported a 17 per cent drop in tour bookings after the higher rate took effect in October 2025. A uniform 2 per cent levy should restore price competitiveness in the peak summer season that starts in April.
For global mobility teams, the change lowers the cash outflow when relocating staff or sending employees overseas for training. Companies that reimburse TCS can expect lower advances, while assignees save paperwork because refunds at the time of filing tax returns will be negligible.
![Budget 2026 slashes Tax Collected at Source on overseas tour packages and remittances]()
Here’s where VisaHQ can remove another layer of friction: its India portal (https://www.visahq.com/india/) lets travellers, consultants and corporate mobility managers research entry requirements, complete digital forms and submit visa applications for hundreds of destinations in one place. By coupling the new 2 per cent TCS with faster, centralised visa processing, customers can redeploy precious cash and time directly into their trips, studies or medical care rather than red tape.
Education consultants said the measure could accelerate applications to countries such as Australia and Canada, where tuition fees are typically remitted through LRS. With Indian students already forming the largest international cohort in several Anglosphere universities, reduced friction may further boost numbers in the 2026-27 academic year.
Travel suppliers must, however, re-configure booking engines quickly; the new rate is effective 1 April 2026. Finance teams should also review payroll gross-up policies for short-term assignments, as the lower TCS may change cost-of-living calculations.
The decision is a direct response to industry feedback that the sharp 20 per cent rate, though refundable, had locked up working capital for middle-class families and small businesses. Travel agencies reported a 17 per cent drop in tour bookings after the higher rate took effect in October 2025. A uniform 2 per cent levy should restore price competitiveness in the peak summer season that starts in April.
For global mobility teams, the change lowers the cash outflow when relocating staff or sending employees overseas for training. Companies that reimburse TCS can expect lower advances, while assignees save paperwork because refunds at the time of filing tax returns will be negligible.
Here’s where VisaHQ can remove another layer of friction: its India portal (https://www.visahq.com/india/) lets travellers, consultants and corporate mobility managers research entry requirements, complete digital forms and submit visa applications for hundreds of destinations in one place. By coupling the new 2 per cent TCS with faster, centralised visa processing, customers can redeploy precious cash and time directly into their trips, studies or medical care rather than red tape.
Education consultants said the measure could accelerate applications to countries such as Australia and Canada, where tuition fees are typically remitted through LRS. With Indian students already forming the largest international cohort in several Anglosphere universities, reduced friction may further boost numbers in the 2026-27 academic year.
Travel suppliers must, however, re-configure booking engines quickly; the new rate is effective 1 April 2026. Finance teams should also review payroll gross-up policies for short-term assignments, as the lower TCS may change cost-of-living calculations.
