TCS Rates for FY 2026-27: Quick Reference, and Two Provisions That No Longer Exist
Tax Collected at Source has consolidated into Section 394 of the Income Tax Act 2025 — but the practical trap right now isn't the renumbering, it's that two provisions many checklists still carry were omitted outright from 1 April 2025.
Current Rates by Category
| Category | Rate | Threshold |
|---|---|---|
| Scrap, timber/forest produce, minerals, liquor, tendu leaves | 2% | None — TCS from the first rupee |
| Parking lot / toll plaza / mining & quarrying rights | 2% | None — TCS from the first rupee |
| Sale of motor vehicle | 1% | ₹10,00,000 per transaction — TCS on the full consideration once crossed, not just the excess |
| Overseas tour package | 2% | None — flat rate from the first rupee (was tiered 5%/20% before FY 2026-27) |
| LRS remittance — education, loan-funded | Nil | Collection is nil where the remittance is funded by a loan from a financial institution, regardless of whether PAN is furnished |
| LRS remittance — education (no loan) or medical treatment | 2% | ₹10,00,000 aggregate per year — TCS only on the excess above the threshold |
| LRS remittance — other purposes (investment, gift, maintenance, etc.) | 20% | ₹10,00,000 aggregate per year — TCS only on the excess |
The distinction between "full consideration once crossed" (motor vehicles) and "only the excess above the threshold" (LRS categories) is easy to apply backwards — a motor vehicle sale at ₹12 lakh owes TCS on the full ₹12 lakh, not just the ₹2 lakh above the threshold, while an LRS remittance of ₹12 lakh for medical treatment owes TCS only on the ₹2 lakh excess.
Two Provisions That Were Omitted, Not Just Renamed
Section 206C(1H) — TCS at 0.1% on sale of goods above ₹50 lakh — was omitted with effect from 1 April 2025, specifically to remove its overlap with Section 194Q TDS on the same purchase. The buyer's TDS obligation under 194Q continues; the seller's TCS obligation under 206C(1H) does not. A seller still collecting 0.1% for FY 2026-27 under this section is applying a repealed provision.
Section 206CCA — the higher TCS rate for income-tax-return non-filers — was omitted the same date, alongside its TDS twin Section 206AB, as part of the same compliance-simplification package. Verifying a buyer's return-filing status before collecting TCS is no longer a live requirement.
Both are the kind of thing that survives in older engagement checklists and templates well past their repeal date, because "we've always checked this" is stickier than tracking every Finance Act amendment.
The No-PAN/Aadhaar Rule Still Applies
Separately from the two omissions above, the higher-rate rule for a buyer or remitter without PAN or Aadhaar is still very much in force: TCS is collected at the higher of twice the normal rate or 5%, capped at 20%, under Section 397(2) of the Income Tax Act 2025 (old Section 206CC) — the TCS mirror of the no-PAN TDS rule under the same Section 397 (old Section 206AA).
Frequently Asked Questions
Is TCS still collected on sale of goods above ₹50 lakh under Section 206C(1H)?
No. Section 206C(1H) was omitted with effect from 1 April 2025 to remove its overlap with Section 194Q TDS on the same purchase.
Is there still a higher TCS rate for buyers who haven't filed their income tax returns?
No — Section 206CCA, which imposed a higher rate for non-filers, was omitted from 1 April 2025, alongside its TDS counterpart Section 206AB.
What's the TCS rate for a buyer without PAN or Aadhaar?
The higher of twice the applicable rate or 5%, capped at 20% — this rule (Section 397(2), old Section 206CC) is still in force and is unrelated to the two omitted provisions above.
Does TCS on motor vehicle sale apply only to the amount above ₹10 lakh?
No — once the ₹10,00,000 per-transaction threshold is crossed, TCS at 1% applies to the entire consideration, not just the amount exceeding ₹10 lakh. This differs from the LRS categories, where TCS applies only to the excess above the aggregate annual threshold.
CORAA's TCS Rate & Threshold Calculator applies the current FY 2026-27 rate and threshold logic for each category — including the full-vs-excess distinction and the no-PAN doubling rule — and flags 206C(1H) and 206CCA explicitly as repealed rather than silently omitting them from the list.