While applying for Schengen visa to Austrian embassy i was asked to provide a complete itinerary, including my hotel bookings and travel details. Since i had not yet received the original Eurail pass by courier, I showed them my Eurail pass booking confirmation for my travel within Europe. The embassy asked me to show my original Eurail pass while taking the visa, which i did on receiving the Type C, multiple entry Schengen visa. Is my Eurail pass tied to my Schengen visa and do i have to use the same for my travel within Europe or can i change my mode of travel and cancel or not use that pass at all, due to change in itinerary?

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In practice, once you are in, you can do (almost) what you want. Such details aren't recorded and you won't have to account for the change while you are in the Schengen area or upon exit.

The main issue is the entry check. You need to have a plan that's credible and fits the visa you have. So showing up somewhere completely unexpected and not going to Austria at all might create problems. And cancelling the pass and showing up at the border with no alternative plan could also be ground for further questioning (if you tell the border guards you are doing a trip across Europe, they are liable to ask how you intend to go from one place to the other…). See Should my first trip be to the country which issued my Schengen Visa? for a full run-down of the rules.

Another thing that could create problems is if you cancel a booking completely before entering the Schengen area and the hotel/provider notifies the authorities. It does happen in some countries even if the legal basis is a bit shaky, see Can I change my route and hotel reservation after getting a Schengen visa? I don't think it would happen for an Eurail pass but I am not 100% sure.

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