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Budget 2026: What is TCS? Finance Minister Nirmala Sitharaman used this word in the budget speech; Know about TCS cuts announced here?

Samira Vishwas | February 2, 2026 7:24 AM CST

What is TCS: Union Finance Minister Nirmala Sitharaman has presented the budget for the year 2026-27. Medicines, mobiles, EV batteries and sports goods have been made cheaper in this budget. Apart from this, major changes have also been made regarding Tax Collected at Source (TCS). Let’s take a look at them.

TCS cut on foreign travel and education

In another people-friendly announcement, the tax collected at source on foreign tour packages has been reduced to a flat 2% in the budget from the earlier 5% and 20% slabs. This will significantly reduce the initial cost for international travelers and is expected to boost outbound tourism.

Education and medical remittances were also reduced

Similarly, TCS on education and medical remittances has been reduced from 5% to 2% under the Liberalized Remittance Scheme, which will provide relief to families who send money abroad for education and critical medical needs and improve cash flows at a time when global costs remain high.

What is TCS?

TCS stands for Tax Collected at Source, which the seller collects from the buyer at the time of sale. Under the Liberalized Remittance Scheme (LRS) or international travel, authorized dealers or tour operators collect this tax to ensure compliance with regulations and track high-value foreign expenses.

This is an advance tax, which means the taxpayer can claim a refund at the end of the financial year or adjust it against his total income tax liability.

Budget 2026: Gold and silver prices skyrocketed as soon as the budget was presented! It fell from Rs 4 lakh to this much – there was an uproar in the market.

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