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FAQs

All that you need to know...

FAQs

faqs

Frequently Asked Questions

What is TCS tax in India?

TCS or Tax Collected at Source is a tax levied by the government of India. TCS is payable by the seller who collects the tax, in turn, from the buyers at the time of sale of goods. These goods or commodities are listed under Section 206C of the Income Tax Act, 1961.

Who is a Seller for TCS?

A seller is categorized as any individual or organization authorized under Tax Collected at Source. The following are defined as Sellers –

  • Central Government
  • State Government
  • Statutory Corporation or Authority
  • Local Authority
  • Company
  • Co-operative Society
  • Partnership Firms
  • Any Individual or Hindu Undivided Family (HUF) defined under the Section 44AB, who has gross receipts or total sales that exceed the specified financial restricts based on the previous year

Who is a Buyer for TCS?

A buyer is categorsied as any individual, who receives the actual goods or the rights of receiving goods at a tender, auction, sale, or other modes. All individuals (except for the below – mentioned list of individuals and organizations) are classified as buyers for TCS –

  • Public Sector Entities
  • Central Government
  • State Government
  • Consulates and any other Trade Representations of a Foreign Nation
  • High Commission Embassies
  • Clubs such as social clubs or sports clubs

Which Goods and/or Transactions are classified under TCS?

The following goods and/or transactions are considered for Tax Collected at Source –

  • Liquors of alcoholic nature including IMFL (Indian Made Foreign Liquor) that are deemed for human consumption
  • Timber wood obtained from a leased forest area
  • Tendu Leaves
  • Timber wood obtained from any mode other than leased
  • Forest produces (other than timber and Tendu leaves)
  • Scrap
  • Parking lot tickets, Toll Plaza, Mining and Quarrying
  • Minerals that include iron ore, lignite or coal
  • Bullion having valuation over Rs. 2 lakh
  • Jewellery whose value exceeds Rs. Five lakhs
  • Motor vehicle purchases over Rs. 10 Lakhs

What are the TCS Rates in India?

The rates of TCS for various goods and transactions are listed in the table below (source – Income Tax Department of India.)

Kindly note that the interest charges for any late payment of the TCS are 1% for every month delayed.

Type of Goods Existing TCS Rate (in %) Reduced TCS Rates (14/05/2020 to 31/03/2021
Liquors of alcoholic nature including IMFL (Indian Made Foreign Liquor) that are deemed for human consumption 1.00 NA
Timber wood obtained from a leased forest area 2.50 1.875%
Tendu Leaves 5.00 3.75%
Timber wood obtained from any mode other than leased 2.50 1.875%
Forest produces (other than timber and Tendu leaves 2.50 1.875%
Scrap 1.00 0.75%
Parking lot tickets, Toll Plaza, Mining and Quarrying 2.00 1.5%
Minerals that include iron ore, lignite or coal 1.00 0.75%
Bullion having valuation over Rs. 2 lakh or Jewelry whose value exceeds Rs. Five lakhs 1.00
Purchase of Motor vehicle exceeding Rs. 10 Lakhs 1.00 0.75%
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