Archive · 18 Nov 2025
Understanding Tax Collected at Source on Overseas Travel Packages
When you buy an overseas travel package, tax is collected upfront.
This tax, called Tax Collected at Source (TCS), can be claimed as a credit in your income tax returns.
It's important to understand how TCS works, how to verify it in your tax records, and how to claim it to reduce your tax liability or get a refund if your tax liability is zero.
Tax Collected at Source (TCS) is applicable on international tour packages
Rates: 5% on payments up to ₹10 lakh, 20% on the portion exceeding ₹10 lakh
Travel agents may not report TCS correctly, leading to errors in Form 26AS
Travellers should verify Form 26AS and claim TCS as a credit in their income tax returns
Using credit cards for payment can help avoid TCS
- Who
- Indian travellers buying overseas holiday packages
- What
- Tax Collected at Source (TCS)
- When
- At the time of booking the overseas holiday package
- Where
- On international tour packages
- Why
- To ensure tax collection on overseas spending
Travel Agents
Travellers
Reporting TCS
Travel Agents
Travel agents may not report TCS under the correct PAN, leading to errors in Form 26AS
Travellers
Travellers should verify Form 26AS and claim TCS as a credit in their income tax returns
- TCS Rates
- 5% on payments up to ₹10 lakh, 20% on the portion exceeding ₹10 lakh
- Form for TCS Verification
- Form 26AS under ‘e-File’ → Part VI
- Form for TCS Claim
- ITR form based on income sources
- Payment Instruments
- Credit cards (no TCS), debit or forex cards (subject to ₹10 lakh threshold)
- Currency for Payment
- Rupee to Indian operators to stay under the 5% rate