Budget 2026 is poised to significantly impact both Indian and foreign travelers with key announcements focused on reduced taxes for overseas packages and a major push for heritage tourism. The Union Budget 2026, presented on Sunday, February 1, 2026, includes proposals that aim to make international travel more affordable and promote India's rich cultural heritage.

Lower TCS on Overseas Packages

One of the most significant announcements for Indian travelers is the reduction in the Tax Collected at Source (TCS) on overseas tour packages. The TCS rate has been slashed to a flat 2%, a considerable decrease from the previous rates of 5% and 20%. Previously, a 5% TCS was applicable on packages up to ₹10 lakh, and 20% for amounts exceeding that limit. This change eliminates the amount stipulation, making foreign travel more accessible and affordable for a wider range of citizens. This move is expected to boost outbound travel by improving cash flows and enabling faster consumer decision-making. This reduction in TCS aims to reduce the upfront tax burden when booking international tour packages.

Heritage Tourism Push

Budget 2026 demonstrates a strong emphasis on promoting India's cultural heritage. A key proposal involves developing 15 archaeological sites into "vibrant experiential destinations". These sites include Lothal, Sarnath, and Hastinapur, among others. The goal is to transform these locations from mere sightseeing spots into immersive cultural experiences. This will involve improving visitor infrastructure, establishing interpretation centers, curating cultural experiences, and enhancing connectivity. The initiative aims to boost heritage tourism, generate local employment, and strengthen heritage conservation. To further enhance destination readiness, the government will launch a pilot scheme to upskill 10,000 tourist guides across 20 iconic sites. This program, developed in collaboration with an Indian Institute of Management (IIM), will offer a standardized 12-week hybrid training course.

In addition, the budget includes the creation of a National Destination Digital Knowledge Grid to digitally document places of cultural, spiritual and heritage significance across the country.

Additional Tourism Initiatives

Beyond TCS reductions and heritage site development, Budget 2026 includes several other initiatives to bolster the tourism sector:

• High-Speed Rail Corridors: The budget proposes the development of seven high-speed rail corridors to improve connectivity between major metros and emerging hubs. These corridors aim to reduce travel times and improve access to Tier-2 and Tier-3 markets, supporting multi-city itineraries and strengthening domestic circuits. The seven proposed corridors are Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Bengaluru–Varanasi, and Varanasi–Siliguri.
• Sustainable Tourism: The government is reinforcing its commitment to responsible tourism by outlining plans to develop ecologically sustainable mountain trails in Himachal Pradesh, Uttarakhand, and Jammu and Kashmir, as well as in Araku Valley in the Eastern Ghats and Podhigai Malai in the Western Ghats.
• Swadesh Darshan 2.0: The Budget also continues strong support for Swadesh Darshan 2.0, the revamped destination-centric tourism scheme, with an allocation of ₹1,900 crore for FY26. The scheme focuses on sustainable and responsible tourism through thematic circuits such as Buddhist, Ramayana, tribal and coastal tourism.

Overall, Budget 2026 aims to position tourism as a key driver of employment-led growth, emphasizing destination development, improved connectivity, and greater private participation. These measures are expected to enhance India's global tourism appeal and boost inbound travel, while also making international travel more affordable for Indian citizens.