Tax Collected at Source across goods, motor vehicles, LRS remittances and overseas tour packages — current FY 2026-27 rates under Sec 394 of the Income Tax Act 2025 (old Sec 206C), with the two provisions that were quietly removed and still turn up in outdated checklists.
| Nature | Old Sec 206C | New Sec 394 | Rate | Threshold |
|---|---|---|---|---|
| Scrap, timber/forest produce, minerals, liquor, tendu leaves | 206C(1) | 394(1) | 2% | None — TCS from the first rupee |
| Parking lot / toll plaza / mining & quarrying rights | 206C(1C) | 394(2) | 2% | None — TCS from the first rupee |
| Sale of motor vehicle | 206C(1F) | 394(3) | 1% | ₹10,00,000 per transaction — on the full consideration once crossed |
| Overseas tour package | 206C(1G) | 394(1) | 2% | None — flat rate from the first rupee (was tiered 5%/20% before FY 2026-27) |
| LRS remittance — education, funded by a loan from a financial institution | 206C(1G) | 394(4)(b) | NIL | Not applicable — collection is NIL |
| LRS remittance — education (no loan) or medical treatment | 206C(1G) | 394(1) | 2% | ₹10,00,000 aggregate per year — TCS only on the excess |
| LRS remittance — other purposes (investment, gift, maintenance, etc.) | 206C(1G) | 394(1) | 20% | ₹10,00,000 aggregate per year — TCS only on the excess |
No PAN/Aadhaar → higher of twice the applicable rate or 5%, capped at 20%, under Sec 397(2), Income Tax Act 2025 (old Sec 206CC). Rates last verified 18 July 2026 against Finance Act 2026 — always confirm against the current Finance Act before collecting on a borderline transaction.
Sec 206C(1H) — TCS at 0.1% on sale of goods above ₹50 lakh — was omitted with effect from 1 April 2025, to remove its overlap with Sec 194Q TDS on the same purchase. Sec 206CCA — the higher TCS rate for non-filers of income tax returns — was omitted the same date, alongside its TDS twin Sec 206AB. Neither reappears under Sec 394 of the Income Tax Act 2025. Material still built on the pre-2025 chart quotes both as live.
Sec 206C of the Income-tax Act 1961 — consolidated as Sec 394 of the Income Tax Act 2025, effective 1 April 2026 — makes the SELLER (or remitting bank, for LRS) collect tax at source on specified transactions, on top of any income-tax the buyer separately owes. Unlike most TDS provisions, several TCS categories (liquor, scrap, timber, minerals, tendu leaves, parking/toll/mining rights, overseas tour packages) carry no minimum threshold — collection applies from the first rupee, at a flat 2% under the Finance Act 2026 rationalisation.
Three different threshold mechanics coexist in the same section. Goods-category collections are flat (no threshold, tax on the full value). Motor vehicle sale above ₹10 lakh is a TRIGGER: once consideration crosses ₹10 lakh, TCS applies to the FULL consideration, not merely the excess — the same "on the full amount once crossed" logic as Sec 194-IA TDS on immovable property. LRS remittances are an EXCESS test: TCS applies only to the amount above the ₹10 lakh aggregate threshold for that purpose in the year, and a loan-funded education remittance is exempt entirely.
A no-PAN/Aadhaar buyer or remitter is collected from at the higher of twice the normal rate or 5%, capped at 20%, under Sec 397(2) of the Income Tax Act 2025 (old Sec 206CC) — the TCS mirror of the no-PAN TDS rule (also Sec 397, old Sec 206AA) already covered on the TDS Rate Finder.
A dealer sells a vehicle for ₹12,00,000 to a buyer who furnishes a valid PAN.
