Vanshika verma | Feb 1, 2026 |
Budget 2026: Major TCS Rate Changes on Liquor, Minerals, and Remittances
In Budget 2026, Finance Minister Nirmala Sitharaman announced important relief by making Tax Collected at Source (TCS) simpler and easier. The budget aims to reduce money pressures, lower advance tax payments, and make it easier to file returns, especially for salaried people, small taxpayers, and families who spend money abroad. The following are the rationalised TCS rates:
Sale of alcoholic liquor
Earlier, Tax Collected at Source (TCS) was levied at 1% on the sale of alcoholic liquor for human consumption. It is now proposed to increase this rate to 2%, which means sellers will collect tax at a higher rate on such sales from the buyers.
Sale of Tendu Leaves
Earlier, Tax Collected at Source (TCS) was levied at 5% on the sale of tendu leaves. It is now proposed to reduce this rate to 2%, thereby providing relief to the collectees and lowering the tax burden on such transactions.
Sale of Scrap and Minerals
Earlier, Tax Collected at Source (TCS) was levied at 1% on the sale of scrap. It is now proposed to increase this rate to 2%, which will result in a higher amount of tax being collected at the source on these transactions.
Sale of Minerals (Coal, Lignite, Iron Ore)
Earlier, Tax Collected at Source (TCS) was levied at 1% on the sale of minerals such as coal, lignite, and iron ore. It is now proposed to increase this rate to 2%, which means that a higher amount of tax will be collected at the source on these mineral transactions.
Remittances under the Liberalised Remittance Scheme (LRS)
Under the Liberalised Remittance Scheme (LRS), Tax Collected at Source (TCS) was levied earlier at 5% on money sent abroad for education or medical treatment exceeding Rs. 10 lakh. It is now proposed to reduce this rate to 2%, while the TCS rate for remittances for other purposes will continue to remain at 20%.
Overseas Tour Programme Package
Earlier, Tax Collected at Source (TCS) was levied on overseas tour packages at 5% for amounts up to Rs. 10 lakh and 20% for amounts above Rs. 10 lakh. It is now proposed to simplify this by fixing a single rate of 2% for all amounts, removing the minimum limit.
These rationalised TCS rates will be effective from April 1, 2026.
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