India’s Union Budget 2026 ushered in a new era of simplified customs rules and taxation for international travel. Both the customs duty and TCS (Tax Collected at Source) have been significantly reduced to encourage inbound and outbound travel for Indians, starting 1 April 2026. On one hand, the customs duty on foreign imports has been halved from the basic 20% to 10% for resident Indians and NRIs, under the new baggage rules. On the other, the TCS rate on overseas travel from India got a major cut.
What is TCS on foreign travel from India?
In India, Tax Collected at Source (TCS) is an advance tax collected on your overseas travel expenses. It applies primarily to international tour packages, like Dubai Experience, booked from India. The tax is deposited with the government under your PAN and can later be adjusted or refunded when you file your income tax return. TCS is not an additional cost, but a temporary collection to ensure your tax compliance and track your international travel spending.
Old TCS vs New TCS rates on foreign tours in 2026
Old TCS rates: Before the Union Budget 2026, TCS on overseas tour packages applied in slabs:
- 5% TCS on tour packages costing up to ₹10 lakh in a fiscal
- 20% TCS on tour package prices exceeding ₹10 lakh in a fiscal
Earlier, a foreign tour of ₹20 lakh would attract ₹2.5–3 lakh as TCS. It meant a large upfront cash outflow for expensive family or luxury trips.
New travel TCS rates: The Union Budget 2026 removed the slabs by introducing a flat 2% TCS on international travel packages, regardless of total costs. The slab system and the ₹10 lakh threshold have been eliminated from the system. There is no minimum booking value for the new 2% TCS.
Know how much TCS to pay on foreign trips from India in 2026:
- ₹10,000 TCS on ₹5 lakh overseas tour package
- ₹20,000 TCS on ₹10 lakh overseas tour package
- ₹40,000 TCS on ₹20 lakh overseas tour package
The flat 2% TCS on international trips clearly denotes that booking tour packages for Dubai, Singapore, Bali, Sri Lanka, or Europe from India will be a lot cheaper for Indians, starting in April 2026.
Is there TCS on booking international flights from India?
“As per the TCS rules for foreign travel, there is no TCS on booking international flight tickets from India and the usage of non-Indian credit cards for the same. The TCS rate applies on overseas tour packages including hotels, sightseeing, local transportation, and/or flights,” said Dheeraj Duvvuru, CEO of Indian Eagle, a leading international travel tech company booking budget air travel between USA, India and other countries.
Alongside the reduced TCS on international tours in 2026, you can save more by traveling to visa-free countries like Singapore, Thailand, Taiwan, Qatar, Sri Lanka, and the Philippines from India, since no visa cost is involved.
