Budget 2025: New TCS rates will affect your foreign travel and dispatch – CNBC TV18

The Union Budget 2025 has increased the threshold for the tax collected on the source (TCS) on removal under the liberal remittance scheme (LRS). The limit has increased from ₹ 7 lakh to ₹ 10 lakh. This change will affect those sending money abroad for travel, education and other expenses.

How does this affect foreign travel

If your international travel expenses are more than ₹ 10 lakh in the financial year, TCS will apply. Currently, TCS rates for traveling abroad are:

5% on zodiac signs above ₹ 10 lakh

20% on an amount above ₹ 7 lakh (except education and medical expenses) for other remittances

This means high advance costs for those who spend heavy spending on foreign trips.

However, the paid TCS can be adjusted when filing income tax returns.

Effect on education and medical dispatch

The government has removed TCS on education remittances made through loans from specified financial institutions. If you send money abroad for education without loan, then 5% TCS applies above 7 lakhs. For medical expenses, 5% TCS rules remain unchanged.

Investments, gifts and other dispatch abroad still attract 20% TCS for zodiac signs above ₹ 7 lakh.

It affects foreign shares, invested in real estate, or sends money as a gift to relatives abroad.

What does it mean to you

• TCS not small remittance below ₹ 10 lakh.
• Large foreign travel expenses will attract high level tax payments.
• The financing of education is relieved through loans.
• Payed TCS can later be claimed as a tax credit.
• The aims of the revised limit are to reduce compliance of small taxpayers while maintaining checks on high-value transactions.