The Tax Collection at Source or TCS is an extra amount collected as tax by a seller of specified goods from the buyer at the time of sale over and above the sale amount and is remitted to the government account. As per Income Tax Act, 1961 certain persons, being the sellers, must collect a specified percentage of tax at the time of receipt of amount from their buyers or at the time of debiting of the account of the buyer whichever is earlier.
The Section 206C of the Income Tax Act mentions the particulars of goods, on sale of which tax needed to be collected from the purchasers.
| Section of Income Tax Act | Category of Goods | Threshold limit | TCS Rate (%) |
| 206C(1) | Sale of Scrap | NA | 1% |
| 206C(1) | Sale of Tendu Leaves | NA | 5% |
| 206C(1) | Sale of Timber obtained under a forest lease or other mode | NA | 2.5% |
| 206C(1) | Sale of any other forest produce not being Timber or tendu leaves | NA | 2.5% |
| 206C(1) | Sale of Minerals, coal lignite, Iron ore by a trader | NA | 1% |
| 206C(1) | Sale of Alcoholic Liquor for Human Consumption | NA | 1% |
| 206C(1C) | Lease or license of the Parking lot, toll plaza, mining & quarrying | NA | 2% |
| 206C(1F) | Sale Value of Motor vehicle whether in cheque or in any other mode of receipt | Rs 10 Lakhs per transaction | 1% |
| 206C(1G) | Foreign remittance through Liberalized Remittance Scheme (LRS) of exceeding Rs. 7 Lakh in a financial year if the remitted amount is out of loan obtained from any financial institution u/s 80E to pursue any education | NA | 0.5% |
| 206C(1G) | Foreign remittance through Liberalized Remittance Scheme (LRS) for education and medical purpose | Rs 7 Lakh | 5% (FY 2022-23, it was 5% in excess of Rs 7 lakh) |
| 206C(1G) | Foreign remittance through Liberalized Remittance Scheme (LRS) in any other case | NA | 20% |
| 206C(1G) | Selling of overseas tour package | NA | 20% (FY 2022-23, it was 5%) |
| 206C(1H) | Sale of goods (Other than those being exported) of value exceeding Rs. 50 Lakh where total Sale/ gross receipts/turnover from business exceeds Rs 10 Crore during immediately financial year | NA | 0.1% |
| 206CC(1) | Non-Filer of ITR | NA | Twice the TCS Rate or 5% whichever is higher (Maximum Rate will not increase 20%) |
