New Delhi: For millions of Indians eyeing an overseas holiday, the taxman has just slipped in some good news. Recent changes in GST rates and TCS rules are expected to make parts of your trip cheaper — especially if you’re the kind who books smart and travels on a budget.
Hotels: Budget Stays Get a Breather
One of the biggest wins is for travellers booking hotel rooms priced at ₹7,500 or less. Until now, these stays carried a 12% GST tag. From September 22, 2025, that drops to 5%.
So, a family spending ₹6,000 a night on a hotel for five nights would earlier have paid an extra ₹3,600 in GST. Now, that bill shrinks to ₹1,500 — a neat saving of over ₹2,000, enough to cover meals or local sightseeing.
Flights: Economy vs. Premium
Airfares, though, are a mixed story. Economy-class tickets stay at 5% GST, which means no extra burden for the majority of flyers. But business and first-class tickets now attract 18% GST. In other words, budget flyers can breathe easy, but luxury seekers may need to rethink or pay up.
TCS: Less Cash Blocked Upfront
Then comes the much-debated Tax Collected at Source (TCS) on overseas spending and tour packages. In recent years, travellers complained that high TCS rates meant a big chunk of money was locked away at the time of booking, only to be adjusted later while filing returns.
The revised rules increase thresholds and simplify categories, which means fewer travellers will see large deductions upfront. For a family booking a ₹5 lakh Europe package, the immediate TCS hit will now be lighter — freeing up cash flow during planning.
What It Means for Travellers
For budget-conscious families, students heading abroad, or honeymooners counting every rupee, the combination of cheaper hotel GST and easier TCS rules can make a noticeable difference. “It’s not just about big savings, but about cash flow,” explains travel consultant Rajiv Arora. “Earlier, people felt penalised for booking overseas packages. Now, they’ll feel freer to spend.”
However, the picture isn’t all rosy. Business-class passengers and luxury travellers may see their costs rise because of the higher GST slab. Analysts say this is the government’s way of keeping premium consumption taxed higher, while giving relief to the middle class.
A Boost for the Travel Industry
The tourism industry is upbeat. Lower costs for mainstream travellers are expected to encourage more bookings during the festive and winter seasons, traditionally India’s peak outbound travel months. Airlines and tour operators believe the changes could help sustain the momentum of revenge travel seen post-pandemic.
Bottom Line
If you’re dreaming of Europe, Southeast Asia, or a family getaway closer home, the latest tax reforms are worth keeping in mind. It might not slash your budget in half — but it could mean that extra day trip, a nicer dinner, or simply the joy of booking with less hesitation.
So, maybe it’s time to dust off that bucket list!
