India, Feb. 2 -- The finance minister in the Union Budget 2026 has provided significant relief to millions of Indian families who remit money overseas to fund their child's education, provide medical treatment for their loved ones or dream of a trip overseas by announcing a sharp reduction in Tax Collected at Source (TCS).

For the past couple of years, taxpayers have been struggling with very high TCS rates on foreign remittances above INR 10 lakh under the Liberalised Remittance Scheme (LRS). While these provisions were introduced to keep a tab on money going overseas and prevent tax evasion, they also ended up creating financial stress due to the following reasons -

Perhaps the biggest issue was the way TCS affected cash flow. TCS is ...