Finance Minister Nirmala Sitharaman announced on Sunday, February 1, 2026, a call to reduce the tax collected at source (TCS) under the Liberalised Remittance Scheme (LRS). She proposed cutting the current 5% TCS on amounts related to education and medical purposes to 2%. Additionally, she suggested reducing the TCS on overseas tour packages from the current rates — 5% for amounts up to ₹10 lakh and 20% beyond ₹10 lakh — to a uniform 2% rate without any amount-based segregation. TCS is the tax collected by the seller at the time of sale, which is over the product's price and paid to the government. While the LRS sets the highest limit for remittance, TCS thresholds decide when tax collection starts. This proposal aims to simplify and reduce the tax burden on education, medical expenses, and international travel via tour packages.