Tax Collection at Source (TCS)
Tax Collected at Source (TCS) is a tax mechanism under Section 206C of the Income-tax Act, 1961, requiring sellers to collect tax on specified transactions from buyers/licensees/lessees. The collected tax is deposited with the Central Government.
Applicability of TCS
Sale of Specified Goods [Section 206C(1)]
- Alcoholic liquor for human consumption.
- Tendu leaves, timber, and other forest produce.
- Scrap and minerals such as coal, lignite, and iron ore.
Leasing or Licensing Transactions [Section 206C(1C)]
- Licensing/leasing of parking lots, toll plazas, mines, or quarries.
Sale of luxury goods [Section 206C(1F)]
- Sale of specified luxury goods of value exceeding Rs. 10 lakhs.
- Specified luxury good is motor vehicle, wrist watch, art piece, collectables (such as coin, stamp), yacht, rowing boat, canoe, helicopter, sunglasses, handbag, purse, shoes, sportswear and equipment, home theatre system, horse for horse racing in race clubs, horse for polo.
Overseas Transactions [Section 206C(1G)]
- Remittances exceeding Rs. 10 lakhs under the Liberalized Remittance Scheme (LRS).
- Purchase of overseas tour program packages.
General Sale of Goods [Section 206C(1H)]
- Sale of goods exceeding Rs. 50 lakhs in a financial year to a buyer by a seller whose preceding year’s turnover exceeds Rs. 10 crores. (This provision is withdrawn with effect from 01-04-2025)