International travellers to and from India have reason to cheer as the Union Budget 2026-27 announced several traveller-friendly changes to customs duties and overseas travel taxation. The key highlights include a sharp reduction in customs duty on personal goods exceeding free limits, lower Tax Collected at Source (TCS) on overseas tour packages, and higher taxes on tobacco products.
These measures are expected to ease the cost burden on passengers, boost outbound tourism, and strengthen compliance at Indian airports.
Key Customs Rule Changes for International Travellers
1. Customs Duty on Personal Goods Slashed to 10%
In a major relief, the government has halved the customs duty on imported personal goods that exceed the duty-free allowance.
- Earlier duty: 20%
- New duty (effective February 1, 2026): 10%
This reduction applies to items carried for personal use and is expected to benefit frequent flyers and returning residents.
2. TCS on Overseas Tour Packages Reduced to 2%
The Tax Collected at Source (TCS) on overseas tour programs has been significantly reduced to 2%, down from earlier rates of 5% and 20%.
- The minimum threshold limit has also been removed, making overseas travel more affordable.
- This move is expected to encourage international travel and reduce upfront cash outflow for tourists.
3. Tobacco Items Become Costlier
Travellers carrying tobacco products should note that new length-based excise duties and a health cess have been introduced on:
- Cigarettes
- Pan masala
These changes have come into effect from February 1, 2026, increasing prices at duty-paid outlets and reinforcing public health goals.
Existing Duty-Free Allowance Limits (Unchanged)
Unless modified in the final fine print, the Baggage Rules, 2016 continue to apply:
General Allowance
- ₹50,000 worth of goods for Indian residents or tourists of Indian origin arriving from countries other than Nepal, Bhutan, or Myanmar.
Liquor Allowance
- Up to 2 litres of alcoholic liquor or wine per passport.
Tobacco Allowance
- 100 cigarettes, or
- 25 cigars, or
- 125 grams of tobacco
Laptop Allowance
- One laptop computer allowed duty-free for passengers aged 18 and above, in addition to the general allowance.
Jewellery Allowance (Stay Abroad Over One Year)
- Women passengers:
- Up to 40 grams, value capped at ₹1,00,000
- Men passengers:
- Up to 20 grams, value capped at ₹50,000
Important Restrictions Travellers Must Know
Televisions
- Flat-panel LCD, LED, or Plasma TVs are not covered under duty-free allowance.
- These attract a customs duty of approximately 38.5%.
Drones
- Import of drones remains restricted or prohibited for general passengers.
- Prior government approvals are mandatory.
Currency Rules
- Indian residents returning from abroad can carry up to ₹25,000 in Indian currency.
What This Means for Travellers
The Union Budget 2026-27 signals a more traveller-centric customs policy, offering financial relief while maintaining strict controls on restricted goods. Lower duties and reduced TCS are expected to improve passenger experience at airports and encourage international travel, while higher tobacco taxes underline the government’s public health priorities.