TCS on Sale of Goods Calculator
Work out the TCS a seller must collect from a buyer on sale receipts above ₹50 lakh in the financial year — live, with a clear breakdown.
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How the TCS is worked out
Section 206C(1H)Get your TCS compliance handled by a CA
We set up collection, deposit challans and file your quarterly Form 27EQ correctly.
Disclaimer: Indicative estimate under Section 206C(1H) of the Income-Tax Act, 1961. Where the buyer is liable to deduct TDS under Section 194Q, that section prevails and no TCS is collected. Confirm applicability with your tax advisor.
TCS on sale of goods — Section 206C(1H)
A seller whose total turnover exceeded ₹10 crore in the previous financial year must collect Tax at Source (TCS) from a buyer on the sale consideration received that exceeds ₹50,00,000 in the financial year from that buyer. The rate is 0.1% of the amount above ₹50 lakh (or 1% where the buyer has furnished no PAN/Aadhaar).
TCS rates under 206C(1H)
TCS is charged only on the slice of receipts above ₹50 lakh — not on the whole amount. It is collected over-and-above the sale price and the buyer claims it as credit in their income-tax return.
| Situation | TCS rate |
|---|---|
| Seller turnover ≤ ₹10 cr (previous FY) | Nil — not applicable |
| Receipts from buyer ≤ ₹50 lakh in the FY | Nil |
| Excess over ₹50 lakh — buyer has PAN/Aadhaar | 0.1% |
| Excess over ₹50 lakh — no PAN/Aadhaar | 1% |
| Buyer liable to deduct TDS u/s 194Q | Nil — 194Q prevails |
Worked examples
A seller with turnover above ₹10 crore receives ₹90,00,000 from one buyer during the FY. TCS applies only to the ₹40,00,000 that exceeds the ₹50 lakh threshold.
Key terms explained
Receipt basis
TCS under 206C(1H) is triggered on the amount actually received from the buyer, not on the invoice value. You collect at the time you receive payment, and only once cumulative receipts from that buyer cross ₹50 lakh in the FY.
₹50 lakh threshold
The first ₹50,00,000 of receipts from each buyer, each financial year, is free of TCS. Only the excess is charged. The threshold resets every financial year and is measured buyer-by-buyer.
194Q vs 206C(1H)
If the buyer is required to deduct TDS on the purchase under Section 194Q, that section takes priority and the seller does not collect TCS. Since 1 Oct 2020 (with overlap resolution refined thereafter), 194Q prevails to avoid double collection.
Over-and-above the price
TCS is added on top of the sale price and shown separately on the invoice. It is not a cost to the seller — the buyer bears it and claims it as tax credit when filing their return. The seller deposits it and files Form 27EQ.
Questions people ask
Short answers on TCS on Sale of Goods (206C-1H). Tap a question to open it.
01Is section 206C(1H) still in force?
No. The TCS on sale of goods under section 206C(1H) was withdrawn with effect from 1 April 2025, to remove the overlap with TDS on purchase of goods under section 194Q. This tool remains useful for computing the liability for periods before that date.
02What did section 206C(1H) require?
A seller with turnover above ₹10 crore in the preceding year had to collect 0.1% TCS on sale consideration received from a buyer in excess of ₹50 lakh in a financial year — 1% where the buyer had not furnished a PAN.
03What applies now instead?
Section 194Q, under which a buyer with turnover above ₹10 crore in the preceding year deducts 0.1% TDS on purchases from a resident seller exceeding ₹50 lakh in a year. The obligation now sits with the buyer.
04Was TCS collected on the invoice value or on receipt?
On receipt. Unlike TDS under 194Q, which is triggered on credit or payment whichever is earlier, TCS under 206C(1H) was collected at the time the consideration was actually received.
05What about TCS already collected in earlier years?
It stands, and is claimed as credit by the buyer in the return for the relevant year. Reconciling old 206C(1H) entries in the AIS remains relevant while those years are open.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.