If you collect tax on a sale, your section number just changed. From 1 April 2026, Section 394 TCS under the Income-tax Act 2025 replaces the old Section 206C, and the 2025 Act also rationalised most rates to a flat 2 percent. This page has a free lookup that turns any old TCS item into its new Section 394 reference, its official e-Pay Tax payment code, the rate and the threshold for Tax Year 2026-27, and then explains the change in plain language.
Payment codes and the Table Sl. No. are from the income tax e-Pay Tax list. If the collectee has no PAN, a higher rate applies under Section 397. Always confirm on the portal before you file.
Start typing an item or an old sub-section. The table below filters as you type.
| Item collected on | Old sub-section | New reference (Section 394) | Payment code | TCS rate (TY 2026-27) | Threshold |
|---|---|---|---|---|---|
| Alcoholic liquor for human consumption | 206C(1) | 394(1), Table Sl. No. 1 | 1068 | 2% | No threshold |
| Tendu leaves | 206C(1) | 394(1), Table Sl. No. 2 | 1069 | 2% | No threshold |
| Timber obtained under a forest lease | 206C(1) | 394(1), Table Sl. No. 3 | 1070 | 2% | No threshold |
| Timber obtained by any other mode | 206C(1) | 394(1), Table Sl. No. 3 | 1071 | 2% | No threshold |
| Any other forest produce (not timber or tendu) | 206C(1) | 394(1), Table Sl. No. 3 | 1072 | 2% | No threshold |
| Scrap | 206C(1) | 394(1), Table Sl. No. 4 | 1073 | 2% | No threshold |
| Coal, lignite or iron ore | 206C(1) | 394(1), Table Sl. No. 5 | 1074 | 2% | No threshold |
| Motor vehicle | 206C(1F) | 394(1), Table Sl. No. 6(a) | 1075 | 1% | Sale value over Rs 10,00,000 |
| Luxury goods (watch, art, yacht, handbag, shoes, sunglasses, home theatre, horse and more) | 206C(1F) | 394(1), Table Sl. No. 6(b) | 1076 to 1085 | 1% | Sale value over Rs 10,00,000 |
| LRS remittance for education or medical treatment | 206C(1G) | 394(1), Table Sl. No. 7.D(a) | 1086 | 2% | Over Rs 10,00,000 a year |
| LRS remittance for any other purpose | 206C(1G) | 394(1), Table Sl. No. 7.D(b) | 1087 | 20% | Over Rs 10,00,000 a year |
| Overseas tour programme package | 206C(1G) | 394(1), Table Sl. No. 8 | 1088 / 1089 | 2% | On the package value |
| Lease or licence of a parking lot | 206C(1C) | 394(1), Table Sl. No. 9 | 1090 | 2% | No threshold |
| Lease or licence of a toll plaza | 206C(1C) | 394(1), Table Sl. No. 9 | 1091 | 2% | No threshold |
| Lease or licence of a mine or quarry | 206C(1C) | 394(1), Table Sl. No. 9 | 1092 | 2% | No threshold |
| Sale of goods over Rs 50 lakh (old 206C(1H)) | 206C(1H) | Removed | – | Nil | – |
TCS in one minute, explained simply
TCS stands for Tax Collected at Source. When you sell certain things, you add a small extra amount on top of the price, collect it from the buyer, and pass it to the government on the buyer behalf. It is the mirror image of TDS. In TDS the payer holds back tax; in TCS the seller collects it. The buyer later adjusts it against their own tax, just like TDS.
For years these rules lived in Section 206C, with a maze of sub-sections. From 1 April 2026 the new law brings them together under Section 394, with a single table and a serial number for each item.
The short version: Section 206C becomes Section 394. Most rates are now a flat 2 percent. Motor vehicles and luxury goods above Rs 10 lakh stay at 1 percent, and a foreign remittance for a non-education purpose is still 20 percent above Rs 10 lakh. TCS on the plain sale of goods is gone.
The new Section 394 TCS rates for 2026-27
Search the tool above, or read the full list below. Every rate is for Tax Year 2026-27 (the year once called FY 2026-27, AY 2027-28).
What actually changed in the rates
- Up to 2 percent: alcoholic liquor, scrap and minerals such as coal, lignite and iron ore rise from 1 percent to 2 percent.
- Down to 2 percent: tendu leaves fall from 5 percent to 2 percent.
- Overseas tour package: a flat 2 percent replaces the old split of 5 percent up to Rs 10 lakh and 20 percent above it.
- Foreign remittance (LRS): 2 percent for education or medical above Rs 10 lakh (nil if funded by an education loan), and 20 percent for other purposes above Rs 10 lakh.
- Motor vehicle and luxury goods: stay at 1 percent on a sale above Rs 10 lakh.
- Gone: TCS on the sale of goods over Rs 50 lakh, the old Section 206C(1H), has been withdrawn.
Four sections replace the old TDS and TCS maze
The 2025 Act tidies deduction and collection into four clear sections:
TDS on salary (old Section 192).
TDS on every non-salary payment. See our Section 393 mapping tool.
TCS, tax collected at source (old Section 206C). You are reading about this one.
TDS and TCS certificates, including the new Form 130 and Form 131.
What a collector should do now
- Quote Section 394 and the correct Table serial number instead of the old 206C sub-section for any collection on or after 1 April 2026.
- Apply the new rate. For most items that is 2 percent; check the tool above for your exact item.
- Use the correct e-Pay Tax payment code, for example 1073 for scrap or 1075 for a motor vehicle.
- Collect the buyer PAN. Without it, a higher rate applies under Section 397.
- Deposit and file on time. The TCS return dates are the same quarterly cycle, and the certificate is now Form 130 or 131.
Need TCS compliance handled?
Our team runs TDS compliance for businesses end to end: monthly challan payments with the correct codes, quarterly returns, Form 16 and the new Form 130 certificates, and notice responses. Tell us about your setup and we will reply with a plan and a quote within one working day.
Frequently asked questions
What is Section 394 of the Income-tax Act 2025?
Section 394 is the new home for TCS, tax collected at source. It replaces the old Section 206C from 1 April 2026. A seller or collector still collects a small extra amount from the buyer at the point of sale and pays it to the government, but you now quote Section 394 and its Table serial number instead of 206C.
What are the new TCS rates for Tax Year 2026-27?
The 2025 Act rationalised most TCS rates to a flat 2%. Alcoholic liquor, scrap and minerals moved up from 1% to 2%, tendu leaves came down from 5% to 2%, and the overseas tour package rate is now a flat 2%. Motor vehicles and luxury goods above Rs 10 lakh stay at 1%, and a foreign remittance under LRS for a non-education purpose is still 20% above Rs 10 lakh.
Is TCS on sale of goods still applicable?
No. The old TCS on the sale of goods over Rs 50 lakh, under Section 206C(1H), has been withdrawn. There is no equivalent code under Section 394, so a seller no longer collects TCS simply for selling goods above that limit.
What is the TCS on foreign remittance and tour packages now?
Under LRS, a remittance for education or medical treatment above Rs 10 lakh a year attracts 2% (nil if funded by an education loan), and any other remittance above Rs 10 lakh attracts 20%. An overseas tour programme package now attracts a flat 2%, which replaces the earlier 5% and 20% structure.
What is the TCS payment code?
Each TCS item has its own code on the income tax e-Pay Tax portal, for example 1073 for scrap, 1068 for alcoholic liquor, 1075 for a motor vehicle and 1087 for an LRS remittance for other purposes. The lookup tool above shows the code for each item. Always confirm the exact code for your case on the portal before you file.
What happens if the buyer has no PAN?
If the person from whom TCS is collected has not given a PAN, tax is collected at a higher rate under Section 397 (the new version of the old 206CC). Keep the buyer PAN on record to avoid the higher collection.
Official source: Confirm the current TCS rates and codes on the new Act pages at incometax.gov.in.
Related: Section 393 TDS mapping tool · Form 16 to Form 130 · TDS due dates FY 2026-27