Planning To Travel Or Study Abroad? Sitharaman Lifts Burden With TCS Cut In Union Budget 2026

New Delhi: Planning to study abroad? Finance Minister Nirmala Sitharaman has given a major boost to the aspirations of Indians who dream of studying or travelling abroad in the Union Budget for the financial year 2026-2027.

While presenting the Budget, Sitharaman announced cuts to the Tax Collected at Source (TCS) rate for education under the Liberalised Remittance Scheme (LRS) from 5 per cent to 2 percent. The TCS rate cut will make it easier for families to send money or fund education or medical expenses of students abroad.

“I propose to reduce the TCS rate for pursuing education and medical purposes under the Liberalised Remittance Scheme (LRS) from 5 per cent to 2 per cent,” Sitharaman said.

Further, in a move to make foreign travel easier and cheaper, the Finance Minister announced that TCS on overseas tour packages would be brought down from the earlier rates of 5 per cent and 20 per cent to 2 per cent, without any stipulation of amount.

What Is TCS?

Tax Collected at Source (TCS) is the tax collected by dealers and banks on money sent by people abroad.

What Is LRS?

Liberalised Remittance Scheme (LRS) is a scheme introduced by the Reserve bank of India (RBI) under which all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April - March) for any permissible current or capital account transaction or a combination of both.

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