The Union Budget 2026 has brought relief to students and families planning to study or travel abroad by reducing the Tax Collected at Source (TCS) rate from 5% to 2% on overseas education and medical expenses under the Liberalised Remittance Scheme (LRS) .

This reduction applies to remittances exceeding Rs 10 lakh and covers self-funded education, medical treatment, and overseas tour packages. The move aims to ease the upfront tax burden, improve cash flow, and simplify tax compliance for individuals .

Key Benefits:

– Reduced TCS rate of 2% on overseas education and medical expenses
– Simplified tax compliance and reduced paperwork
– Improved cash flow for students and families
– Increased affordability for overseas education and travel

The TCS cut is expected to benefit thousands of Indian students and families planning to study or travel abroad. However, it’s essential to note that TCS is not an additional tax and will be adjusted against the individual’s total income tax liability