Tax Collected at Source (TCS) is an income tax, collected by the seller of specified goods, from the buyer. TCS is a concept where a person selling specific items is liable to collect tax from a buyer at a prescribed rate and deposit the same with the Government.
TCS Rate Chart
Given below are the latest TCS rates:
| Section | Collection Code | Nature of Payment | Threshold (INR) | TCS rates |
| 206C | A | Alcoholic Liquor for Human Consumption | NA | 1% |
| B | Timber obtained under a forest lease | NA | 2.5% | |
| C | Timber obtained by any mode other than under a forest lease | NA | 2.5% | |
| D | Any other forest produce not being timber or tendu leaves | NA | 2.5% | |
| E | Scrap | NA | 1% | |
| F, G | Grant of a license, lease, etc of the Parking lot and Toll Plaza respectively | NA | 2% | |
| H | Grant of Mining and Quarrying | NA | 2% | |
| I | Tendu Leaves | NA | 5% | |
| J | Minerals, being coal or lignite, or iron ore | NA | 1% | |
| K | Sale of Bullion | > 2 lakh | 1% | |
| L | Sale of the motor vehicle whether payment is received by cheque or by any other mode | > 10 lakh | 1% | |
| M | Sale in cash of any other goods except bullion & Jewelry | > 2 lakh | 1% | |
| N | Providing of any service (other than Ch-XVII-B) | > 2 lakh | 1% | |
| O | TCS for sale of overseas tour program package | NA | 20% | |
| P | TCS on remittance under LRS for an educational loan taken from a financial institution as mentioned in Section 80E | NA | 0.5% | |
| Q | Foreign remittance under LRS | -7 lakh in case of remittances for education and medical purpose -No limit in the case of other foreign remittance |
-5% in case of education and medical remittance -20 %in case of other foreign remittances |
|
| R | TCS on sale of goods | NA | 0.1% (1% in case of non-availability of PAN/Aadhar) |
Major TCS Amendments in Budget 2023
Section 206C (1G) Enhanced TCS rate on certain Foreign Remittances
In the past, the TCS rate on foreign remittances was 5%. Budget 2023 proposed to increase the TCS rate to 20% (w.e.f 1st July 2023) in case of all the remittances under LRS and overseas tour packages. However, the TCS rate for educational and medical purposes in excess of INR 7 lakh continues to be at 5%.
