Finance Minister Nirmala Sitharaman announced significant relief for the common man in the Union Budget 2026 on February 1. The government has decided to lower the cost of international travel by reducing the Tax Collected at Source (TCS). Apart from travel, everyday items like mobile phones and microwave ovens are set to become cheaper due to reductions in customs duties. These changes aim to reduce the financial burden on consumers and simplify tax rules for travelers.
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Which items will get cheaper after the new announcement?
The government has removed or reduced customs duties on various imported parts, which will directly impact the final price of products. For mobile phones, the duty has been exempted on 28 components, including batteries and display panels. This move is expected to bring down the cost of smartphones assembled in India. Similarly, basic customs duty on specific parts used to manufacture microwave ovens has been removed, making them more affordable for households.
Healthcare has also received attention in this budget. The basic customs duty on 17 medicines used for cancer treatment has been completely removed. Additionally, drugs and food items imported for treating rare diseases are now duty-free. Other items like leather footwear and solar panels may also see a price dip due to duty cuts on their raw materials.
What are the new rules for Foreign Travel and TCS?
Planning a foreign trip has become easier with the new tax rules. Previously, travelers had to pay a TCS of 5% to 20% depending on how much they spent, especially if the amount crossed 7 Lakhs. The government has now slashed this rate to a flat 2% for all foreign tour packages. The earlier threshold limit has been removed, meaning this low rate applies to every package booking.
This reduction in TCS is not just for tourists. The rate has also been lowered to 2% for money sent abroad (remittance) for education and medical treatment purposes. This change reduces the upfront cash required when booking trips or sending money for essential services outside India.
