TCS on Foreign Tour Packages in India: The 2026 Guide for Travel Agents
When TCS applies to overseas tour packages, the 5% vs 20% slabs, the ₹7 lakh threshold, what to show on your invoice, and how to collect and deposit it without losing customers. Plain-English, for Indian tour operators.
If you sell overseas holidays to Indian travellers, TCS — Tax Collected at Source — is now part of every quote you give. Get it wrong and you either eat the tax yourself or surprise the customer at payment time. Here's the plain-English version. (Not legal advice — confirm specifics with your CA.)
What TCS is, in one line
When an Indian resident buys an "overseas tour programme package," the seller (you) must collect an extra percentage on top of the package price and deposit it with the government. The customer later adjusts it against their income tax. It's not your cost — it's their tax, collected through you.
The slabs you need to memorise
For overseas tour packages, in a financial year, per buyer:
- Up to ₹7 lakh: 5% TCS
- Above ₹7 lakh: 20% TCS on the amount beyond ₹7 lakh
So a ₹9 lakh Europe package to one traveller is roughly 5% on the first ₹7 lakh and 20% on the remaining ₹2 lakh. The ₹7 lakh threshold is per buyer, per financial year — across all packages — which is why tracking matters once a client books more than one trip.
When it does not apply
- Purely domestic packages (Char Dham, Kerala, Goa) — no TCS. This is the big one for pilgrimage and domestic operators: TCS is an outbound concern.
- TCS is separate from GST. You still apply GST under your chosen scheme — see our GST invoicing guide — and TCS sits on top.
What this means for your quote
The cleanest practice is to show TCS as a separate line on the invoice, not bury it in the package price:
Tour package (per pax) ₹2,40,000
GST @ 5% ₹ 12,000
TCS @ 5% ₹ 12,000
Total payable ₹2,64,000
Two reasons: the customer can see it's a refundable tax credit (not your margin), and your books cleanly separate package revenue, GST, and TCS collected.
Collecting and depositing it
- Collect TCS along with the package payment.
- Deposit it to the government against the buyer's PAN.
- File the TCS return so it reflects in the buyer's Form 26AS / AIS — that's what lets them claim it.
Miss the PAN and the rate can jump, so capture the traveller's PAN at booking for any overseas package.
Where software helps
The error-prone parts are (a) remembering the ₹7 lakh per-buyer running total across multiple bookings, and (b) putting TCS on the invoice consistently. A travel CRM that knows each client's year-to-date overseas spend and auto-computes the slab removes both. That's the direction we're building Tripaay — see how it fits outbound and general operators.
The bottom line
TCS isn't a tax on your business — it's a collection duty. Show it transparently, capture PANs, track the ₹7 lakh threshold per client, and it becomes a non-event. Hide it and you'll fight about it at payment time, every time.
This article is general information, not tax advice. Rules and thresholds change — verify with a qualified CA before you invoice.