How to Configure TCS on Overseas Tour Packages in Tally Prime

For travel operators, agency networks, and corporate event planners in India, the sale of international holiday bookings involves tax compliance under the **Tax Collected at Source (TCS)** regulations. The revised guidelines have simplified the tax rates for overseas tour program packages under Section 206C(1G) of the CGST/IT framework.

Effective April 1, 2026, the previous slab system has been replaced with a **flat 2% TCS rate** applied from the first rupee. Let's look at how to set up your Tally Prime configuration to handle these calculations.

1. Deciphering the Flat 2% TCS Travel Mandate

Under Section 206C(1G) of the Income Tax Act, any seller of an overseas tour program package who receives an amount from a buyer must collect TCS.

Key highlights of the statutory rules include:

• Exemption Threshold: There is **no threshold limit** for tour packages. TCS must be collected on all transactions, regardless of the invoice value.
• Rate: The rate is set at a flat **2%** (with PAN) and doubles to **4%** if the buyer does not provide a valid PAN.

2. Setting Up TCS in Tally Prime

To configure Tally Prime for overseas travel TCS collections:

Step 1: Enable TCS in Company Features

Press **F11 (Features)**, set **Enable Tax Collected at Source (TCS)** to **Yes**, and enter your tax registration details (TAN and Collector type).

Step 2: Create TCS Nature of Goods

1. Go to **Gateway of Tally > Create > TCS Nature of Goods**.
2. Enter a descriptive name: **"Overseas Tour Packages - 2%"**.
3. Set the Section to **206C** and Payment Code/Payment Type to **1G**.
4. Under **Rate with PAN**, enter **2%**. Under **Rate without PAN**, enter **4%**. Save the settings.

Step 3: Create Duty and Sales Ledgers

Create a ledger named **"TCS on Overseas Travel"** under **Duties & Taxes**. Select **TCS** as the Type of Duty/Tax and link it to the newly created Nature of Goods.

Next, alter your Sales Account ledger (e.g., "Tour Booking Income"). Set **TCS Applicable** to **Applicable** and choose the travel package Nature of Goods.

3. Booking Sales Invoices with TCS

When billing a client for an international booking:

Create a **Sales Voucher (F8)**. Select the customer ledger, map the package sales item/ledger, and add the GST duty accounts (CGST/SGST or IGST based on location).

Finally, add the **TCS on Overseas Travel** duty ledger. Tally Prime will calculate the 2% charge on the total taxable invoice value (including GST) and append it to the voucher. Save the entry to record the transaction.