TCS Rate Chart FY 2026-27 — IT Act 1961 vs IT Act 2025 Section Comparison
Tax Collected at Source (TCS) is governed by Section 206C of the Income Tax Act 1961, covering a wide range of transactions — from sale of scrap, timber, minerals and alcoholic liquor to lease of parking lots and mines, sale of motor vehicles above ₹10 lakh, and foreign remittances under the Liberalised Remittance Scheme (LRS). Unlike TDS (which is deducted by the payer), TCS is collected by the seller, lessor, or authorised dealer and deposited with the government.
From 1 April 2026, the Income Tax Act 2025 replaced the IT Act 1961, renumbering TCS provisions from Section 206C to Section 394. Every collector now needs to know both the old section number (used in prior returns and TRACES) and the new IT Act 2025 reference. Section 394 of the IT Act 2025 consolidates all TCS provisions previously under 206C.
Key FY 2026-27 TCS provisions include: LRS remittances for overseas tour packages at 20% on the full amount (no ₹7 lakh threshold); other LRS remittances above ₹7 lakh at 20% (with carve-outs for education and medical at 5% and 0.5%); sale of goods by sellers with turnover exceeding ₹10 crore at 0.1% on amounts over ₹50 lakh per buyer; and sale of motor vehicles above ₹10 lakh at 1%.
This TCS rate chart covers all major provisions for FY 2026-27 (AY 2027-28), with Form 27EQ nature of collection codes, threshold limits, collector type, and practical compliance notes. For TDS rate reference, see our TDS Rate Chart. For DTAA treaty withholding tax rates on NR payments, see our DTAA Rate Finder. Built by our Ex-Big 4 CA team.
TCS is collected by the seller/lessor from the buyer at the point of transaction. TDS is deducted by the payer before making a payment. Both are deposited via ITNS 281 (TCS under Minor Head 200). If both TCS and TDS apply to the same transaction, typically only one applies — e.g., 206C(1H) TCS is not applicable if 194Q TDS has already been deducted.
If the buyer / remitter does not furnish PAN or Aadhaar, TCS must be collected at twice the applicable rate or 5%, whichever is higher, under Sec. 397(2) of IT Act 2025 (old: Sec 206CC of IT Act 1961).
For LRS remittances (206C(1G)), TCS is collected by the authorised dealer at the time of remittance. The buyer can claim credit for TCS against their income tax liability for the year in which the TCS is collected.
TCS paid is reflected in Form 26AS of the buyer/remitter and can be claimed as a credit against their income tax liability. Buyers should verify Form 26AS to ensure the TCS is correctly reported.