Union Budget 2026-27: Sitharaman calls to reduce tax collected on source for pursuing education, medical purposes under to 2%

Finance Minister Nirmala Sitharaman, on Sunday (February 1, 2026), called to reduce the tax collected on source (TCS) for pursuing education and medical purposes under the liberalised remittance scheme (LRS) from the present 5% to 2%.

Further, she called to reduce the TCS on overseas tour programme packages, presently at 5% (for amount stipulations until ₹10 lakh) and 20% (beyond ₹10 lakh) to 2%. This would be without any segregation based on the stipulated amount, she added.

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TCS refers to the tax collected by the seller of a commodity at the time of sale. It is over and above the price of the commodity and is required to be remitted to the government’s account.

For clarity, while LRS designates the upper limit of remittance, the TCS threshold would determine when the taxation eligibility is triggered.