Article contains updated TCS Rate Chart for For Assessment year 2020-21 (Financial year 2019-20) and Assessment year 2021-22 (Financial year 2020-21) updated with latest changes made by press release dated 13th May, 2020 and Finance Act, 2020. It further explains newly inserted TCS Provisions of Section 206C(1G)(a) – TCS on foreign remittance through Liberalised Remittance Scheme (LRS), Section 206C(1G)(b) – TCS on selling of overseas tour package and Section 206C(1H) – TCS on sale of any goods [except goods on which TCS applicable as per Section 206C (1), 206C (1F) and 206C (1G)].

Finance Minister has has made various changes in TDS provisions vide Finance Act, 2020 and Introduces two New TCS Sub-Sections i.e. Section 206C(1G) and 206C(1H) which provides TCS on foreign remittance through Liberalised Remittance Scheme (LRS) and on selling of overseas tour package TDS as well as TCS on sale of goods over a limit. Post these changes some of our readers has asked us to come up with a TCS Chart applicable for Financial Year 2020-21. Hence, here we come up with TCS rate chart for Assessment Year 2020-21 (Financial Year 2019-20) and Assessment Year 2021-22 (Financial Year 2020-21) which is updated with changes announced by  finance Minister on 13th May 2020.

TCS Rate

TCS Rate

TCS Rate Chart For Assessment year 2020-21 and Assessment year 2021-22

Section Particulars TCS Rates (in %) (AY 2020-21) TCS Rates (in %) (Upto 13th May, 2020) TCS Rates (in %) (From 14th May, 2020 to 31st March, 2021)
206C(1) Sale of the following:
a) Alcoholic Liquor for Human Consumption 1% 1% 1% (No Change)
b) Tendu leaves 5% 5% 3.75%
c) Timber obtained under a forest lease 2.5% 2.5% 1.875%
d) Timber obtained by any mode other than under a forest lease 2.5% 2.5% 1.875%
e) Any other forest produce not being timber or tendu leaves 2.5% 2.5% 1.875%
f) Scrap 1% 1% 0.75%
g) Minerals, being coal or lignite or iron ore 1% 1% 0.75%
206C(1C) Grant of lease or license of the following:
a) Parking lot 2% 2% 1.5%
b) Toll Plaza 2% 2% 1.5%
c) Mining and quarrying (Other than mining and quarrying of mineral oil, petroleum and natural gas) 2% 2% 1.5%
206C(1F) Sale of the motor vehicle of the value exceeding Rs. 10 lakh whether payment is received by cheque or by any other mode 1% 1% 0.75%
206C(1G)(a) TCS on foreign remittance through Liberalised Remittance Scheme (LRS)

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 1 for in depth explanation of this new section)

NA 0.5%: Where
remittance is a repayment of loan obtained for the
purpose of
pursuing any
education.5% In any other
case.(wef 01.10.2020)

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

0.5%: Where
remittance is a repayment of loan obtained for the
purpose of
pursuing any
education.5% In any other
case.(wef 01.10.2020)

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

206C(1G)(b) TCS on selling of overseas tour package

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 2 for in depth explanation of this new section)

NA 5%

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

5%

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

206C(1H) TCS on sale of any goods [except goods on which TCS applicable as per Section 206C (1), 206C (1F) and 206C (1G)]

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 3 for in depth explanation of this new section)

NA 0.10%

(1% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

0.075%

(1% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

Notes:

1. Section 206C(1G)(a) – TCS on foreign remittance through Liberalised Remittance Scheme (LRS)

  • An authorised dealer receiving an amount or an aggregate of amounts of seven lakh rupees or more in a financial year for remittance out of India under the LRS of RBI, shall be liable to collect TCS, if he receives sum in excess of said amount from a buyer being a person remitting such amount out of India, at the rate of 5%.
  • In non-PAN/Aadhaar cases the rate shall be 10%.
  • This section will not be applicable in following cases:
    • If the buyer is liable to deduct TDS under any other provisions and has deducted
    • If a buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG
  • authorised dealer” is proposed to be defined to mean a person authorised by the Reserve Bank of India under sub-section (1) of section 10 of Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign security.

Some more in depth clarification on this section to avoid doubts at the time of actual implementation:

  • TCS shall be applicable on amount in excess of ₹ 7 lakhs in a financial year and not on the total amount.
  • Please note that in cases where the amount is remitted for the purpose of pursuing education through a loan obtained from any financial institute, rate of TCS shall be 0.5% on amount exceeding ₹ 7 lakhs.
  • The GST will continue to apply on currency conversion and on Remittance Service Charge. The same will not be applied on the tax collection.

2. Section 206C(1G)(b) – TCS on selling of overseas tour package

  • A seller of an overseas tour program package who receives any amount from any buyer, being a person who purchases such package, shall be liable to collect TCS at the rate of 5%.
  • In non-PAN/ Aadhaar cases the rate shall be 10%.
  • There is no monetary limit for this transaction, irrespective of any amount TCS must be collected by seller of that package
  • This section will not be applicable in following cases:
    • If the buyer is liable to deduct TDS under any other provisions and has deducted
    • If a buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG
  • Overseas tour program package” is proposed to be defined to mean any tour package which offers visit to a country or countries or territory or territories outside India and includes expenses for travel or hotel stay or boarding or lodging or any other expense of similar nature or in relation thereto.

3. Section 206C(1H) – TCS on sale of any goods [except goods on which TCS applicable as per Section 206C (1), 206C (1F) and 206C (1G)]

  • A seller of goods is liable to collect TCS at the rate of 0.075% on consideration received from a buyer in a previous year in excess of fifty lakh rupees.
  • Export of goods is not covered under TCS on sale of goods
  • In non-PAN/ Aadhaar cases the rate shall be 1%.
  • Only those sellers whose total sales, gross receipts or turnover from the business carried on by it exceed ten crore rupees during the financial year immediately preceding the financial year, shall be liable to collect such TCS.
  • No such TCS is to be collected, if the seller is liable to collect TCS under other provision of section 206C such as Section 206C (1), 206C (1F) and 206C (1G) or the buyer is liable to deduct TDS under any provision of the Act and has deducted such amount.
  • The above provision would not apply where
    • the buyer is liable to deduct TDS under any other provisions of the Act like Alcoholic Liquor for Human Consumption, Scrap, Minerals etc. and has deducted such amount; or
    • the buyer is the Central/State Govt., an embassy, a High Commission, Legation, Consulate, the trade representative of foreign state, local authority; or
    • any class of person notified by the Central Govt. in the official gazette for the purpose subjects to such condition as specified in that notification.

(Article is been compiled by CA Sandeep Kanoi and CA Prapti Raut and updated with changes announced by  finance Minister on 13th May 2020 )

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13 Comments

  1. Manoranjan Maity says:

    Is it as right under mentioned points:
    1) TCS @ 0.075% on Sales of any goods if aggregate Sales value exceeds fifty Lakh during the FY 2020-21 and w.e.f 01-10-2020.
    Please suggest .
    Thanks.

  2. KHUSHBU says:

    1. TCS U/S 206C(1H) ON AGGREGATE RECEIPT FOR ALL SALES TO ONE PARTY OR SINGLE SALE AMOUNT TO THE PARTY RECEIPT?

    2. AND TCS COLLECTED BILL RAISED AFTER 01-10-2020 OR APPLICABLE IT FOR PERIOD OF 01-04-2020 TO 30-09-2020????

  3. Ashwin Mehta says:

    The TCS of 5% under LRS of RBI, can be taken as Credit for the subsequent year’s Tax liability of the Remitter ? Suppose in the next year, his taxable income falls below the minimum prescribedd limit, will he be receiving this amount as “REFUND” after filing the tax return.??? Please explain

  4. Gopi J says:

    Sir, After budget is there any changes in TCS rate % for jewelry purchase and for bullion purchase. Kindly clear my doubt and do the needful for me.

  5. Arvind Srivastava says:

    Dear Sir,
    Please clarify the following points;
    1) TCS applicable on entire sale or only sales in excess of Rs. 50 Lakh.

    2) TCS is to calculated on sales including GST or excluding GST.

    3) Is TCS u/s 206(1H) also applicable on export sale?

    Thanks.

  6. Krishnan S says:

    Please Send / Post Income Tax Return Forms
    I T R 1 SAHAJ , And IT R 4 for Assessment
    Year 2020 – 21 , Which May Be Helpful For
    Many To Prepare The I T Returns .

    Thanks.

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