TCS: tax collected at source by the seller
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Updated 03 Oct 2026
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AI summary
Which sellers collect tax on the sale, the new rates from April 2026, and how to file.
4 sections 4 steps
What TCS is
With TDS the payer deducts. With TCS the seller collects extra tax from the buyer on top of the price and deposits it. The buyer claims credit for it.
Main TCS items (section 394, old 206C)
| Sale | Rate from 1 April 2026 |
|---|---|
| Alcoholic liquor for human use | 2% |
| Scrap | 2% |
| Coal, lignite, iron ore (minerals) | 2% |
| Tendu leaves | 2% |
| Motor vehicle or notified luxury goods above ₹10 lakh | 1% |
| Overseas tour package | 2% |
| Foreign remittance for education or medical (LRS) above ₹10 lakh | 2% |
| Foreign remittance for other purposes above ₹10 lakh | 20% |
TCS on the general sale of goods above ₹50 lakh (old 206C(1H)) no longer applies. The buyer deducts 0.1% TDS instead, if their turnover is above ₹10 crore.
Steps
- Collect TCS when you receive payment or raise the bill, whichever is earlier.
- Deposit by the 7th of the next month.
- File Form 143 (earlier 27EQ) quarterly by the 15th of the month after the quarter.
- Issue Form 133 (earlier 27D) to buyers.
GST and TCS
TCS is collected on the value including GST. GST is not charged on the TCS amount.
Law as of September 2026. Verify against the latest notifications before relying on it for filings.
Sources
PreviousTDS on salary: what employers must do Next in TDS & TCS Reconcile TDS with Form 168 (26AS) and AIS
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