The Section 394(1) Table, Sl. No. 1 to 9
The person in column C collects tax on the receipt in column B at the rate in column D, at the time of debiting the amount payable by the buyer, licensee or lessee to his account or at the time of receipt of the amount, whichever is earlier. The rates below are those in force from 1 April 2026, the date on which both the Act and the Finance Act, 2026 amendments took effect.
| Sl. No. | Nature of receipt | Collector | Rate | Rate before the Finance Act, 2026 |
|---|---|---|---|---|
| 1 | Sale of alcoholic liquor for human consumption | Seller | 2% | 1%, changed by FA 2026 s. 85(a) |
| 2 | Sale of tendu leaves | Seller | 2% | 5%, changed by FA 2026 s. 85(b) |
| 3 | Sale of timber whether obtained under a forest lease or otherwise; or any other forest produce (not being timber or tendu leaves) obtained under a forest lease | Seller | 2% | No change |
| 4 | Sale of scrap | Seller | 2% | 1%, changed by FA 2026 s. 85(c) |
| 5 | Sale of minerals, being coal or lignite or iron ore | Seller | 2% | 1%, changed by FA 2026 s. 85(d) |
| 6 | Sale consideration exceeding ten lakh rupees in case of (a) motor vehicle; or (b) any other goods, as may be notified by the Central Government | Seller | 1% | No change |
| 7(a) | Remittance under the Liberalised Remittance Scheme of an amount or aggregate of the amounts exceeding ten lakh rupees, for purposes of education or medical treatment | Authorised dealer | 2% | 5%, changed by FA 2026 s. 85(e) |
| 7(b) | Remittance under the Liberalised Remittance Scheme of an amount or aggregate of the amounts exceeding ten lakh rupees, for purposes other than education or medical treatment | Authorised dealer | 20% | No change |
| 8 | Sale of overseas tour programme package, including expenses for travel or hotel stay or boarding or lodging or any such similar or related expenditure | Seller | 2% | 5% of amount or aggregate of amounts up to ten lakh rupees and 20% of the amount exceeding ten lakh rupees, changed by FA 2026 s. 85(f) |
| 9 | Use of parking lot or toll plaza or mine or quarry for the purpose of business, excluding mining and quarrying of mineral oil (including petroleum and natural gas) | Licensor or lessor | 2% | No change |
Forest produce has the meaning given in any State Act for the time being in force or in the Indian Forest Act, 1927 (section 394(6)).
Work Out the TCS on a Sale or Receipt
Pick the receipt, enter the amount and say whether the buyer has given a PAN and, for goods under Sl. No. 1 to 5, the manufacturing declaration.
For a buyer resident in India: no surcharge or cess is added. Sl. No. 6 (motor vehicles) and 7 (Liberalised Remittance Scheme) are left out because the Table does not say whether tax is on the whole amount or only on the part above ten lakh rupees. Lower collection certificates are not applied.
Where Tax Is Not Collected
| Provision | Entry | No collection where |
|---|---|---|
| s. 394(2) | Sl. No. 1 to 5 | The buyer is resident in India and furnishes a written declaration in the prescribed form that the goods are to be utilised for the purposes of manufacturing, processing or producing articles or things or for generating power, and not for trading purposes. |
| s. 394(4)(a) | Sl. No. 7 | The amount is one on which tax has already been collected by the seller of an overseas tour programme package under Sl. No. 8. |
| s. 394(4)(b) | Sl. No. 7 | The amount being remitted out is a loan obtained from a financial institution as defined in section 129(3)(b) for the purpose of pursuing any education. |
| s. 394(5) | Sl. No. 7 and 8 | The buyer is liable to deduct tax at source under any other provision of the Act and has deducted such tax. |
| s. 402(6), Sl. No. 2 | Sl. No. 1 to 5 | The person buying is a public sector company; the Central or a State Government, or an embassy, High Commission, legation, commission, consulate or trade representation of a foreign State; a club; or a buyer in the retail sale of such goods purchased by him for personal consumption. |
| s. 402(6), Sl. No. 3 | Sl. No. 6 | The person buying is the Central or a State Government or a foreign mission as above; a local authority as defined at Schedule III (Table: Sl. No. 22); or a public sector company engaged in the business of carrying passengers. |
| s. 402(6), Sl. No. 4 and 5 | Sl. No. 7 and 8 | The remitter or purchaser is a public sector company, a local authority as above, or any other person the Central Government may notify. |
Under section 394(3) the collector delivers one copy of the section 394(2) declaration to the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner on or before the seventh day of the month following the month of its receipt.
Who Is the Seller
- For Sl. No. 1 to 6 the seller is the Central Government, a State Government, a local authority, a corporation or authority established under a Central, State or Provincial Act, a company, a firm or a co-operative society.
- An individual or Hindu undivided family is a seller for Sl. No. 1 to 6 only if the total sales, gross receipts or turnover from business or profession exceeded one crore rupees in case of business or fifty lakh rupees in case of profession in the tax year immediately preceding the tax year of sale.
- For Sl. No. 8 the seller is a person who sells an overseas tour programme package.
No PAN, Surcharge and Cess
| Point | Rule | Source |
|---|---|---|
| Person paying does not furnish a valid Permanent Account Number | Tax is collected at the higher of twice the rate specified in the provision or 5%, not exceeding 20%. | ITA 2025, s. 397(2)(b)(ii) |
| Non-resident without a permanent establishment in India | The higher rate for a missing PAN does not apply. | ITA 2025, s. 397(2)(d) |
| Surcharge on TCS | The collection is made at the section 394(1) rates. The surcharge Table names only non-resident persons and companies other than domestic companies. | FA 2026, s. 3(9) |
| Health and Education Cess on TCS | 4% on tax and surcharge, but not where the amount is paid to a domestic company or any other person who is resident in India. | FA 2026, s. 3(16) and 3(17)(i) |
| Failure to collect | The person responsible for collecting remains liable to pay the tax to the credit of the Central Government. | ITA 2025, s. 397(3)(h) |
Late Fee and Penalty
Simple interest at 1% for every month or part of a month from the date tax was collectible to the date it is collected, and 1.5% for every month or part of a month from the date of collection to the date it is paid. It is paid before the statement is filed. ITA 2025 · s. 398(3)
₹200 for every day the statement is late, not exceeding the tax collectible, paid before the statement is delivered. ITA 2025 · s. 427(1) and (2)
₹10,000 to ₹1,00,000. Not levied for delay if the tax, fee and interest were paid and the statement is filed within one month of the due date. ITA 2025 · s. 461
The collector is an assessee in default and the Assessing Officer may impose a penalty equal to the tax not collected. For Sl. No. 1 to 5 and 9 the collector is not in default if the buyer has filed the return, included the amount and paid the tax, certified by an accountant in Form 150. ITA 2025 · s. 398(1), (2) and 449 · rule 221
Simple imprisonment up to two years or fine or both where the tax exceeds fifty lakh rupees; up to six months or fine or both above ten lakh rupees; fine in other cases. Not applicable if paid by the due date of the statement. ITA 2025 · s. 477, as substituted by FA 2026
What You Pay in Common Cases
Scrap sold for ₹10,00,000 to a trader with PAN
Same sale, buyer without PAN
Overseas tour package sold for ₹3,00,000
Coal sold to a power producer that gives Form 127
How to Apply and Pay
- 1Get a TANEvery person collecting tax applies for a tax deduction and collection account number (s. 397(1)(a)).
- 2Collect at debit or receiptWhichever is earlier: when the amount is debited to the buyer’s account or received from the buyer (s. 394(1)(c)).
- 3Deposit by the 7thWithin seven days from the end of the month of collection, by 30 April for March (rule 218(2)).
- 4File Form 143 each quarterBy 31 July, 31 October, 31 January and 31 May (rule 219(1) Table Sl. No. 4 and 219(4)).
- 5Issue Form 133Within fifteen days from the due date of Form 143 (rule 215(1), Table Sl. No. 4).
Documents to file with it
- Valid Permanent Account Number of the buyer, licensee or lessee; without it, tax is collected at the higher rate (s. 397(2)(b)(ii))
- Form 127 declaration in duplicate from a resident buyer under Sl. No. 1 to 5 who uses the goods for manufacturing, processing, producing or generating power (rule 212)
- Tax deduction and collection account number of the collector, quoted in challans, statements and certificates (s. 397(1)(b))
- Lower collection certificate of the buyer under section 395(3), if any
- Form 150 accountant certificate, where tax was not collected but the buyer has filed the return and paid the tax (s. 398(2), rule 221)
How to Use This Chart
- For Sl. No. 1 to 5, check whether the buyer has given the section 394(2) declaration before collecting.
- For Sl. No. 6 and Sl. No. 7 the ten lakh rupee figure is part of the description of the receipt in column B.
- For a remittance that pays for an overseas tour package, tax is collected once: by the seller under Sl. No. 8, not again by the authorised dealer under Sl. No. 7.
- Whether tax under Sl. No. 6 and 7 is computed on the whole amount or only on the part above ten lakh rupees is not stated separately in the Table, so it is not stated here.
- Goods notified by the Central Government under Sl. No. 6(b) are not listed.
- Lower collection certificates under section 395(3) are not shown.
- Surcharge rates for non-resident buyers in section 3(9) of the Finance Act, 2026 are not reproduced.
- Whether TCS is worked out on an amount including GST, and the credit of TCS in the buyer’s return, are not covered.
Official documents behind this page
- Income-tax Act, 2025 (30 of 2025), as enacted, Gazette of India ExtraordinarySection 394(1), Table "Tax collection at source", Sl. No. 1 to 9; section 394(2) to (6); section 397(2)(b)(ii), 397(2)(d) and 397(3)(h); section 402(6) (buyer, Sl. No. 2 to 5) and 402(33) (seller); section 1(3) (commencement on 1 April 2026).
- Finance Act, 2026 (4 of 2026), Gazette of India Extraordinary, 30 March 2026Section 85, clauses (a) to (f): substitution of the rates against Sl. No. 1, 2, 4, 5, 7(a) and 8 of the section 394(1) Table; section 1(2)(a) (sections 2 to 129 in force from 1 April 2026); section 3(9), 3(16) and 3(17).
- Income-tax Act, 2025 as amended by the Finance Act, 2026 (consolidated copy)Used as a second reading of the amended Table: footnotes 86 to 89 record the substituted rates with effect from 1 April 2026. Also read for the calculator, penalties and steps: section 394(1)(c); section 397(1)(a) and (b), 397(2)(b)(ii), (d), (f) and (g); section 398(1) to (3); section 427; sections 449 and 461; section 477(1) as substituted by the Finance Act, 2026.
- Income-tax Rules, 2026 (notified 20 March 2026)Rule 212 (Form 127 declaration in duplicate; copy to the Commissioner by the 7th), rule 215(1) Table Sl. No. 4 (Form 133), rule 218(2) (time of deposit), rule 219(1) Table Sl. No. 4 and 219(4) (Form 143 and the quarterly due dates), rule 221(1)(b) (Form 150).
Disclaimer: This chart reproduces fees and rates from the official documents listed above, as read on 2 October 2026. It is general information, not professional advice for your case. Fees, rates and slabs are changed by notification, and the amount the authority’s portal or challan asks for on the day you pay is the one that applies. The calculator only adds up the figures on this page; it does not know your facts or any later change. TaxClue is not responsible for a decision taken on this page alone. Check the current notification on the official website before you pay or file.