Tax collected at source (TCS)

20 Oct 2022

Tax Collected at Source (TCS)


  1. Sale of goods [Section 206C(1)]

a. Every person other than Individual/HUF selling following goods is required to collect tax at source (TCS) from the buyers at the following  rates: ::


b. No need to deduct TCS if the goods buys for personal consumption.

c. No need to deduct TCS if the goods buy by Public Sector Co., CG, SG, Embassy, High commission, Legation, Consulate, Trade representation or clubs

d. No need to deduct TCS if the Buyer furnishes a declaration to the seller that goods are to be used in manufacturing/production of any article OR for the purpose of generation of power


2. Lease or license of parking lot, toll plaza or mine or quarry [Section 206C(1C)]:


  1. Every person other than Individual/HUF Leasing or licensing any parking lot, toll plaza or mining and quarrying is required to collect TCS from buyers other than Public Sector companies.

  2. Rate of tax- 2%

  3. mining and quarrying of Mineral oil is not covered by this section


3. Sale of motor vehicle [Section 206C(1F)]:


  1. Every Retail seller other than Individual/HUF selling Motor vehicles of value exceeding Rs.10 Lakhs is required to collect TCS from buyers.

  2. Rate of tax- 1%

  3. No need to deduct TCS if the goods bought by Public Sector Co. engaged in passenger carrying business, CG, SG, Embassy, High commission, Legation, Consulate, Trade representation or Local Authorities.

  4. The limit of Rs.10 Lakhs applicable to each individual  purchase


4. Foreign remittance or sale of Overseas tour package:


  1. Every Authorized Dealer or seller of overseas tour program packages (OTPP) is required to collect TCS from buyers.

  2. Rate of tax - 5%

  3. No need to deduct TCS if the amount of foreign remittance is upto Rs.7 lakhs.

  4. No need to deduct TCS if TDS deducted by buyer under any section on purchase value

  5. No need to deduct TCS if the goods bought by CG, SG, Embassy, High commission, Legation, Consulate, Trade representation or Local Authorities.

  6. If foreign remittance is made out of Education loan taken from Financial Institution, the rate of TCS will be 0.5%


5. Sale of goods of value exceeding 50 lakh [Section 206C(1H)]:


  1. Every person, whose turnover in last year is more than Rs.10 crores, selling goods of the value or aggregate of such value exceeding Rs.50 lakhs in a financial year to a buyer is required to collect TCS from such buyers at the time of receiving consideration.

  2. Rate of tax- 2%

  3. No need to deduct TCS if the goods bought by CG, SG, Embassy, High commission, Legation, Consulate, commission, Trade representation of foreign state, Person importing goods, Local Authorities or other notified.

  4. No need to deduct TCS if TDS deducted by buyer under any section on purchase value

  5. Seller need to deduct TCS @ 1% if buyer not submit PAN or Aadhar.


Manojit Das