Budget 2026 TCS Rate Changes Explained

Union Budget 2026 introduces rationalised TCS rates aimed at simplifying compliance and reducing unnecessary cash flow pressure on taxpayers.

TCS on Sale of Specified Goods

TCS on alcoholic liquor, scrap, and minerals such as coal, lignite, and iron ore has been increased to 2 percent from the earlier 1 percent.

Overseas Tour Packages

TCS on overseas tour packages has been reduced to a flat 2 percent without any threshold, replacing the earlier multi-slab structure.

LRS Education and Medical Remittances

Nil TCS applies up to ₹10 lakh, with a reduced 2 percent rate beyond that limit for education and medical remittances.

Other LRS Remittances

For other foreign remittances under LRS, TCS remains nil up to ₹10 lakh and 20 percent above the threshold.

Impact of Changes

The revised rates provide relief to individuals while requiring businesses to update internal systems and compliance processes.

Conclusion

Overall, the TCS proposals in Budget 2026 aim to strike a balance between tax compliance and taxpayer convenience.