TCS on Travel Transactions
Everything You Need to Know — 2026 Guide
When you send money abroad for a trip — whether it's a packaged holiday, a direct hotel booking, or a forex card top-up — the government collects a small advance tax at the point of payment. This is called Tax Collected at Source (TCS). With Budget 2026-27 bringing big changes effective 1 April 2026, this guide covers everything you need to know
What is TCS?
TCS stands for Tax Collected at Source. Under Section 206C(1G) of the Income Tax Act, whenever an Indian resident remits money abroad under the Liberalised Remittance Scheme (LRS), the authorised dealer — your bank or tour operator — collects TCS at the time of the transaction.
TCS is NOT an extra tax.
It is an advance tax — fully adjustable against your final income tax liability when
you file your ITR.
If TCS exceeds what you owe, you get a full refund.
Two Types of Travel Remittances
The four most common travel transactions where TCS comes into play: airplane booking, hotel booking, forex card, and tour packages.
Standalone Travel (Non-Package)
Booking flights, hotels, or forex separately — not as a bundled package.
- Booking a return flight to Dubai or London— directly on airline website or via MakeMyTrip — only the ticket
- Paying for a hotel in Paris or Singapore— booked separately on Booking.com or Agoda — no package
- Topping up a Forex / Travel card— such as BookMyForex, Niyo, or a bank forex card before your trip
- Wire transfer for overseas hotel deposit— sending USD/EUR directly to the hotel's bank account via your bank
- Visa fee payment via bank transfer — remitting the visa application fee for USA, Schengen, UK, etc.
| Remittance Amount (Per FY) | TCS Rate — Eff. 1 Apr 2026 |
|---|---|
| Up to ₹10 Lakhs | 0% — Exempt |
| Above ₹10 Lakhs | 20% on amount exceeding ₹10L |
Bundled Overseas Tour Packages
A packaged tour covering airfare + accommodation + sightseeing booked through a registered tour operator or OTA.
| Package Value | Old TCS Rate | NEW TCS Rate — From 1 April 2026 |
|---|---|---|
| Up to ₹10L | 5% | Flat 2% — No threshold |
| Above ₹10L | 20% | Flat 2% — No threshold |
The old complex slab system is completely gone.
It is now a flat 2% on ALL overseas tour packages, — from the very first rupee.
No threshold. No slab. Simple, transparent, and lower for most travellers.
On a ₹15 Lakh Tour Package
What Qualifies as a Tour Package?
A bundled package must include all of:
- International airfare
- Accommodation
- Local sightseeing or transport
- Other related travel expenses
Does NOT Qualify
- A standalone flight ticket
- A hotel-only booking
- A visa fee paid separately
TCS still applies even when you book through Indian portals like MakeMyTrip, Yatra, or EaseMyTrip — and pay in Indian Rupees.
What is the TCS Rate Now?
Effective 1 April 2026 — Budget 2026-27
| Transaction Type | Threshold | Current TCS % |
|---|---|---|
| Standalone flights, hotels, forex card | Up to ₹10 Lakhs / FY | 0% (Exempt) |
| Standalone flights, hotels, forex card | Above ₹10 Lakhs / FY | 20% on amount exceeding ₹10L |
| Bundled overseas tour packages | From the very first rupee — no threshold | FLAT 2% |
International Credit Card payments are currently outside the LRS framework — no TCS applies.
Payment Method Matters
Critical: PAN–Aadhaar Linking
If your PAN is not linked to Aadhaar, your remittance will be BLOCKED.
Link your PAN at: incometax.gov.in → Profile Settings → Link PAN with Aadhaar
How to Claim Your TCS Back
TCS is your money — here is how to get it back when you file your ITR.
TCS Collected & Deposited
Your bank or tour operator collects TCS and deposits it with the Income Tax Department under your PAN
Check Your Form 26AS / AIS
Log in to the Income Tax portal and verify TCS credit — it reflects within 2–3 business days.
Collect Form 27D
Request the TCS Certificate (Form 27D) from your bank or tour operator.
Report in Your ITR
When filing your Income Tax Return, report the TCS amount as a tax credit against your liability
Receive Your Refund
If TCS exceeds your total tax liability, the excess is refunded directly to your bank account.