TCS on foreign tour packages explained in plain words

By the Nexara Holidays travel desk · 2 min read

When you book an international holiday from India, your quote may include an amount called TCS, or Tax Collected at Source. Many travellers are surprised by it. Here is what it is, in plain words.

This is general information, not tax advice. Rules and rates have changed several times in recent years, so check the current position with a tax adviser or the Income Tax Department.

What TCS is

Under Indian income tax law, a seller of an overseas tour package must collect tax at source from the buyer and deposit it with the government. It is collected on top of the package price, at a percentage set by law.

It is not an extra cost if you pay income tax

TCS is linked to your PAN. It appears in your annual tax statement (Form 26AS or the Annual Information Statement), and you can claim credit for it against your income tax liability when you file your return. If your tax liability is lower than the TCS collected, you can claim a refund.

How the amount is decided

The percentage depends on the law in force when you pay, and has included different rates above and below certain thresholds per financial year. Because the thresholds and rates have been revised in recent budgets, we calculate TCS using the rules applicable on your payment date and show it as a separate line in your quote.

What counts as an overseas tour package

Generally, a package that includes travel and stay or similar services abroad. Buying only flights, or only hotels separately, may be treated differently. Your tax adviser can confirm how it applies to your purchase.

What you need to provide

• Your PAN (and the PAN of the person paying).
• Correct name and details, so the credit appears in your tax records.

Practical tips

• Keep the TCS certificate or statement we provide.
• Check that the TCS appears in your tax statement after the quarter.
• If you are not required to file a return, consider filing to claim a refund.

See Money abroad: forex cards, credit cards and cash for Indian travellers for more on spending abroad, and How to read a travel quote and compare packages fairly for how taxes appear in a holiday quote.