Enhanced Threshold Limit For TCS
The
threshold limit for TCS for remittance under Liberalised Remittance Scheme
(LRS) and foreign tour packages
has been increased to Rs. 10 Lakhs from the previous limit of Rs. 7
Lakhs.
Further, TCS
will not be applicable on LRS for education if financed through education loan.
Section 206C(1G) covering TCS on educational loans has been removed from April
1, 2025.
The enhanced
threshold for TCS is given in the following table:
|
Section |
Before 1st April 2025 |
From 1st April 2025 |
|
206C(1G) –
Remittance under LRS and overseas tour program package |
7,00,000 |
10,00,000 |
|
206C(1G) -
Remittance under LRS for education if financed through educational loans |
7,00,000 |
Nil (No TCS Applicable) |
|
206C(1H) - Purchase of Goods |
50,00,000 |
Nil (No TCS Applicable) |
Basic briefing of provisions of TCS
rate as covered under the Income Tax
Section
206C of the Income Tax Act, 1961 covers the particulars of the goods
on the sale of which TCS needs to be collected by the seller from the
purchaser/ buyer. Before understanding the TCS rates for FY 2024-25, it is
important to understand the ‘classification of buyers’ and ‘classification of
sellers’ for the purpose of TCS. The same is explained in the TCS & TCS
rate on sale of goods table below –
|
Classification
of Buyers |
Classification
of Sellers |
|
A buyer
is a person who purchases goods, except for the following:
|
A
seller includes the following entities:
|
TCS Rate Chart for FY 2024-25 (Assessment Year 2025-2026)
The following table summarizes the applicable TCS section
list and the corresponding TCS rate chart for FY 2024-25–
|
Nature
of Payment |
TCS
Rate (%) |
|
Alcoholic
liquor for human consumption, tendu leaves |
1 |
|
Timber
(forest lease or other modes) |
2.5 |
|
Other
forest produce (excluding timber, tendu leaves) |
2.5 |
|
Scrap |
1 |
|
Parking
lot, toll plaza, mining, quarrying |
2 |
|
Tendu
leaves |
5 |
|
Minerals,
bullion, jewellery |
1 |
|
Sale of
motor vehicle |
1 |
|
Cash
sale of goods (excluding bullion) |
1 |
|
Service
provision (excluding Ch-XVII-B) |
1 |
|
Tour
package |
5 |
|
LRS –
Educational loan (financial institution) |
0.5 |
|
LRS –
Other purposes (Liberalized Remittance Scheme) |
5 |
|
Sale of
goods |
0.1 |
|
LRS –
Education/medical treatment (excluding Code P) |
5 |
Note: If PAN is not provided, the TCS rate
will be either double the applicable rate or 5%, whichever is higher.