LRS limit budget 2026: In Budget 2026, TCS under LRS for foreign travel, education and treatment has been reduced from 5% to 2%. This will reduce upfront expenses, reduce refund hassles and provide great relief to the middle class.
Budget 2026 Foreign Tour: Common people and middle class have got a big relief in Union Budget 2026. Finance Minister Nirmala Sitharaman has announced to reduce the Tax Collected at Source (TCS) on money sent for foreign travel, studies abroad and medical treatment. Under the Liberalized Remittance Scheme (LRS), the TCS rate has now been reduced from 5% to just 2%. This decision will not only reduce people’s upfront expenses, but will also eliminate problems related to tax refunds to a great extent.
1. Direct benefit to those traveling abroad
TCS on overseas tour packages has been reduced to 2% in Budget 2026. Earlier this rate was 5% and in some cases up to 20%. Due to this, people had to pay a higher amount in advance as tax while booking an international trip. Now, due to lower TCS, travel booking will be cheaper and the immediate financial burden on passengers will be reduced.
2. There will be less hassle of tax refund
Earlier, due to high TCS deduction, people had to wait for months for refund after filing ITR. Lower TCS means less over-collection and better cash flow. This will also make tax compliance easier, especially for those who have a simple income structure.
3. Boost to middle class and travel industry
This decision of the government will boost expenses related to international travel, education and health. Lower TCS will increase people’s confidence and it will be easier to take the decision of traveling or studying abroad.
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