In order to reduce the quantum of cash transaction in sale of any goods and services and for curbing the flow of unaccounted money in the trading system and to bring high value transactions within the tax net, it is proposed to amend the Section 206C of Income Tax Act,1961 to provide that w.e.f 01st June 2016 seller has to collect the tax from the purchaser as per the following table

Sr. No.Transaction TypeRate of TCSPayment Mode


Sale of motor vehicle of the value exceeding ten lakh rupees




Sale in cash of any goods (other than bullion and jewellery) exceeding two lakh rupees


Cash or Partly Cash


Providing of any services (other than payments on which tax is deducted at source under Chapter XVII-B) exceeding two lakh rupees


Cash or Partly Cash

Other important points :

  • Tax (TCS) has to be collected at the time of debiting of the amount payable to the buyer or at the time of receipt of payment, whichever is earlier.
  • Due date for deposit of TCS is 7th of next month in which TCS was collected by the Seller.
  • Interest at the rate of 1% per month or part thereof for late collection and/or late deposit of TCS with Government
  • The seller\ contractor i e. deductor has to file a quarterly return in form 27EQ and in Form 27A and has to issue the TCS certificate to Deductee in Form 27D on or before following Due Date:


Due Dates for filing TCS ReturnDue Dates for issuing TCS Certificate
1st (April-June)

15th July

30th July

2nd (July-Sept)

15th October

30th October

3rd (Oct-Dec)

15th January

30th January

4th (Jan-March)15th May

30th May

Click here for clarification regarding applicability of TCS provision where payment partly in cash and partly in cheque.

TCS Provisions w.e.f 01st June 2016

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