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(1) — goods, leases, motor vehicles and LRS remittances each sit at their own serial number in the Section 394(1) table, which our chart shows row by row alongside the challan code for deposit. Every collector now needs to know both the old section number (used in prior returns and TRACES) and the new IT Act 2025 reference.
Key FY 2026-27 TCS provisions include: LRS remittances for overseas tour packages at 20% on the full amount (no threshold); other LRS remittances above ₹10 lakh at 20%, with medical treatment and self-funded education at a concessional 2% above the same ₹10 lakh threshold; and sale of motor vehicles above ₹10 lakh at 1%. Two provisions have been dropped altogether — the concessional TCS on education funded by a bank loan (206C(1G)(ii)) and the 0.1% levy on large sellers of goods (206C(1H)) no longer apply.
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). Where both could once apply to a goods transaction, TDS u/s 194Q prevailed; the goods-sale TCS (old 206C(1H)) itself now stands removed.
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.