TCS on Overseas Tour Package - Rules, Rates and Exemptions in 2025

If you travel abroad frequently or are planning your first trip, it's important to understand the TCS (Tax Collected at Source) on tour packages. According to the  Liberalised Remittance Scheme(LRS) of RBI, resident individuals (including minors) can remit funds outside India with ease under a permissible limit. To regulate the foreign remittances, TCS (Tax Collected at Source) is collected by the sellers on all payments exceeding Rs. 10 Lakh from the buyer. The sellers then deposit TCS to the government. In this article, we will discuss in detail the TCS on tour package.

What is TCS on Overseas Tour Packages?

Overseas Tour Package includes the travel expenses for travelling abroad, hotel accommodation and other expenses. Travel tickets alone or accommodation expenses do not qualify for an overseas tour package.

Section 206C(G) of Income tax act, 1961 mandates overseas tour package operators to collect TCS  from the individuals travelling abroad. As announced in budget 2025, the threshold limit of remittances (under LRS) made to overseas tour package sellers has increased to Rs. 10 lakh from 7 lakh.

Applicability of TCS on Overseas Tour Package Program

• TCS is collected for every foreign remittance (except education and medical) in excess of Rs. 10,00,000
• Regardless of turnover made in the previous year, every tour package operator is required to collect TCS and deposit it to the government within the deadline.
• Every travel operator is mandated to register for the TAN (Tax Deduction and Collection Account number)
• TCS is applicable on money transfers or purchases through Debit, Forex cards or international cards. 

TCS Rates on Overseas Tour Packages

Under Finance Act 2025, the applicable TCS rates are 5% and 20%. 

How to Pay TCS for Foreign Travel?

When resident individuals (buyers) buy overseas tour packages, TCS gets collected by the foreign tour package operators (sellers) at a prescribed rate. The seller deposits TCS to the government within the specified dates. Payment in Indian rupees on booking with domestic online travel portals like MakeMyTrip, Yatra.com also qualifies for TCS collection.

Due Dates to Pay TCS on Overseas Tour Package

• The seller needs to pay TCS to the government on or before 7 days from the month's end when TCS is collected
• Failing to collect TCS or submit it to the government within the due dates, the seller has to pay an interest of 1% per month or part of the month

TCS Return Due Dates

Seller has to submit quarterly TCS returns, Form 27EQ to the government within the due dates.

How Can the Buyer Claim for the TCS Refund Credit?

• On filling the TCS return, the seller has to issue a TCS certificate, Form 27D within 15 days from the date of filing TCS returns. 
• When the seller has filed a TCS return, the TCS amount gets reflected in the form 26AS of the buyer. 
• The buyer can deduct the TCS amount from the net tax payable. If the TCS amount is greater than the net tax payable, the buyer can claim the tax refunds on filing an Income Tax Return

Exemptions of TCS for Foreign Travel

The following are the TCS exempted buyers:

• Central Government
• State Government
• High Commission
• Embassy
• Legation

Note:  No TCS if buyer has deducted TDS under any section.

Conclusion

TCS on overseas Tour Package is a regulatory measure to ensure transparency on Foreign travel remittances. Both the buyer and seller need to know about the recent TCS rates so that they can know about the amount of taxes that need to be paid and collected. The seller of the tour package program should file for TCS returns within the due dates. The buyer can also claim for the TCS refund on filing his income tax returns.