Complete TCS rate chart FY 2025-26. The Indian government collects taxes in different ways to ensure compliance and revenue generation. One of these mechanisms is TCS (Tax Collected at Source) under the Income Tax Act, 1961. In simple terms, TCS is collected by the seller from the buyer at the time of sale and then deposited with the government.
For Financial Year (FY) 2025-26 / Assessment Year (AY) 2026-27, the government has made important changes to TCS provisions. Let’s look at the latest TCS rates in detail.
📋 TCS Rate Chart FY 2025-26
| Section / Code | Nature of Transaction | Threshold / Conditions | TCS Rate (%) |
|---|---|---|---|
| 206C(1) | Alcoholic liquor for human consumption | No specific threshold | 2% |
| 206C(1) | Indian-made foreign liquor (IMFL) | No specific threshold | 1% |
| 206C(1) | Scrap | — | 1% |
| 206C(1) | Tendu leaves | — | 5% |
| 206C(1) | Timber or forest produce (other than tendu leaves) | — | 2% |
| 206C(1F) | Sale of motor vehicles & other high value items (above ₹10 lakh) | Per transaction > ₹10 lakh | 1% |
| 206C(1C) | Parking lot, toll plaza, mining & quarrying / lease or license | — | 2% |
| 206C for “Overseas Tour Package” | Tourist package payments | — | 5% |
| 206C(1G) | Remittance under LRS (other than education/medical) | Remittances > ₹10 lakh | 20% |
| 206C(1G) | Remittance under LRS for education / medical treatment | > ₹10 lakh | 5% |
Key Changes in FY 2025-26 🔄
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TCS on sale of goods under section 206C(1H) is removed from April 2025.
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More luxury goods (watches, handbags, artworks, etc.) now fall under section 206C(1F) if sold above ₹10 lakh.
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Timber TCS rate reduced from 2.5% to 2%.
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LRS remittances continue with higher rates, making compliance stricter.
Compliance Tips for Businesses 🧾
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Always check TCS applicability before raising invoices.
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Deposit TCS with the government within due dates.
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File quarterly TCS returns (Form 27EQ) on time.
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Issue TCS certificates (Form 27D) to buyers to help them claim credit.
Conclusion ✅
The TCS Rate Chart for FY 2025-26 provides clarity for sellers, buyers, and tax professionals. Staying compliant ensures smooth business operations and avoids penalties. Whether you deal in liquor, scrap, vehicles, foreign remittances, or luxury goods, make sure you apply the correct TCS rate.