## Section 206C(1G) — TCS on Overseas Tour Package

### Slab-Based TCS Rates (Current Position)

When a person buys an overseas tour package, the tour operator must collect TCS as follows:

Aggregate Amount of Package	TCS Rate
Up to ₹10 Lakhs	5%
Above ₹10 Lakhs (excess portion only)	20%

### Application Mechanism

The slabs apply progressively — split the package value at the ₹10 Lakh threshold.

Worked example

### Example 1

Example: Mr. A buys an overseas tour package for ₹15 Lakhs from a tour operator.

TCS Computation:

Slab	Amount (₹)	Rate	TCS (₹)
First ₹10 Lakhs	10,00,000	5%	50,000
Excess (₹15L − ₹10L)	5,00,000	20%	1,00,000
Total TCS			1,50,000

Tour operator collects ₹1,50,000 from Mr. A in addition to the package price.

⚠️ Common exam mistakes

Applying 20% to the entire package value when it exceeds ₹10 Lakhs — only the excess over ₹10L is taxed at 20%.
Applying 5% throughout the entire package without applying the slab structure.
Confusing the overseas tour package TCS rates with LRS remittance rates (which had different threshold of ₹7 Lakhs).
Forgetting that the responsibility to COLLECT lies with the tour operator, not the buyer.

Bare-Act text Section 206C(1G) · Income-tax Act, 1961 · click to expand

U/s 206C(1G), If we Buy an Overseas package of 15 Lakhs from the Tour Operator, TCS will be collected as follows: 10 Lakhs x 5%; 5 Lakhs x 20%.

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Section 206C(1G) - TCS on Overseas Tour Package

Worked example