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9. Accounting for Surcharge and Cess If the bonus pushes your total annual income above ₹50 lakh, a surcharge (starting at 10%) is applied to the calculated tax. Additionally, a 4% Health and Education Cess is levied on the sum of the income tax and surcharge. This is a mandatory final step in determining the actual "cost" of the bonus in terms of tax outflow to the government. Example: A high-income individual’s bonus pushes total income beyond ₹50 lakh, triggering surcharge and additional cess.(Image: Canva)
Budget
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CNBC TV18•01-02-2026, 12:55

Budget 2026: Overseas Travel, Education, Medical Remittance TCS Rates Slashed to 2%

  • •Union Budget 2026 proposes a significant reduction in Tax Collected at Source (TCS) rates on certain overseas payments under the Liberalised Remittance Scheme (LRS).
  • •TCS on overseas tour packages is cut to 2% from previous slab-based rates (5% and 20%), with no minimum threshold, making international travel bookings cheaper.
  • •TCS on education and medical remittances under LRS is reduced from 5% to 2%, easing upfront costs for families sending money abroad for studies or treatment.
  • •Experts like Anita Basrur and Supreme Kothari highlight that this move improves liquidity for taxpayers and reduces cash-flow pressure, making foreign services more affordable.
  • •The changes are expected to support outbound tourism demand and streamline cross-border payments and compliance for individuals and NRIs.

Why It Matters: Budget 2026 significantly cuts TCS rates on overseas travel, education, and medical remittances to 2%, easing financial burden.

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