Compute the 0.1% TCS collection for business sellers with previous year turnover > ₹10 Crores receiving consideration for goods exceeding ₹50 Lakhs.
Must exceed ₹10,00,00,000 (₹10 Cr).
Unlike Section 194Q, TCS under Section 206C(1H) is collected on Receipt Basis (when money is received in bank) on the gross consideration including GST.
Seller collects TCS and deposits by 7th of next month via Form 27EQ, issuing Form 27D to buyer.
Section 206C(1H) requires every seller whose total turnover from business exceeds ₹10 Crores in the preceding financial year to collect Tax Collected at Source (TCS) at 0.1% from a buyer if consideration received from that buyer exceeds ₹50 Lakhs in the current financial year.
TCS under Section 206C(1H) is strictly triggered upon receipt of payment (whether advance, current, or past receivables), not at the time of raising the invoice. TCS is calculated on the actual gross amount collected into the bank account including GST.
Section 206C(1H) does NOT apply to: (1) Export of goods outside India, (2) Goods already covered by other TCS provisions (alcohol, scrap, minerals, motor vehicles > ₹10L), or (3) Transactions where buyer is liable to deduct TDS under Section 194Q.
| Compliance Field | Statutory Rule |
|---|---|
| TCS Rate with Buyer PAN | 0.10% on receipt exceeding ₹50 Lakhs |
| TCS Rate without Buyer PAN | 1.00% under Section 206CC |
| Quarterly TCS Return | Form 27EQ |
| TCS Certificate to Buyer | Form 27D generated from TRACES |
The collected TCS is credited to the buyer's Form 26AS / AIS. The buyer can set off this TCS against their advance tax, self-assessment tax, or claim a cash refund in their annual ITR.
Although TCS is triggered on receipt, standard commercial practice allows sellers to add TCS in the invoice itself once the ₹50 Lakh threshold is crossed, to ensure smooth collection.
As per Section 194Q(5), buyer TDS under Section 194Q takes absolute precedence. The buyer will deduct TDS, and the seller will not collect TCS.