Our TCS Compliance Process
Step 1 – Assess Applicability
We confirm which of your transactions attract TCS and at what rates under the current law.
Step 2 – Set Up TAN & Process
We ensure you have a TAN and put a clean collection process in place (PAN capture, 27C).
Step 3 – Collect Correctly
We guide correct collection on each sale, including the no-PAN and 27C situations.
Step 4 – Deposit on Time
We prepare the challan and deposit the collected TCS by the monthly due date.
Step 5 – Reconcile the Quarter
We match collections, deposits and buyer PANs before filing.
Step 6 – File Form 27EQ
We file the quarterly TCS return accurately and on time.
Step 7 – Issue Form 27D
We generate and issue the TCS certificates to your buyers.
Step 8 – Correct If Needed
We file correction statements to fix any error or mismatch.
Step 9 – Handle Notices
We respond to any short-collection, late-payment or default notices.
Step 10 – Report and Advise
We keep you updated and flag any rule changes affecting you.
Step 11 – Link to Your Filing
We ensure your TCS position ties into your books and income-tax filing.
Get TCS Compliance Done Without the Hassle
Share you detail. We will advise you on next steps.
TCS Compliance Services in Vasai Virar - Collect, Deposit, File Right
If your business sells scrap, timber, minerals, motor vehicles or other specified goods, you’re required to collect Tax Collected at Source (TCS) from your buyers, deposit it, file quarterly returns and issue certificates all on time. Miss any step and you face interest, penalty and a deemed-default position that also blocks your buyer’s tax credit. Digital Vasai Tax handles end-to-end TCS compliance in Vasai Virar so collection, deposit, returns and certificates are always accurate and on schedule.
TCS, or Tax Collected at Source, is a mechanism under Section 206C of the Income Tax Act where the seller of certain specified goods (and providers of certain rights or services) collects a small percentage of tax from the buyer at the point of sale, over and above the sale price, and deposits it with the government. It’s a mirror of TDS, but on the collection side: instead of the payer deducting tax, the seller collects it. It applies to specific transactions – scrap, timber and forest produce, minerals, alcoholic liquor, high-value motor vehicles and notified luxury goods, leasing of parking lots/toll plazas/mines and remittances under the Liberalised Remittance Scheme, each with its own rate and threshold.
TCS compliance is more than just collecting the tax. As a collector, you must have a TAN, collect at the correct rate, deposit the tax by the due date, file a quarterly TCS return (Form 27EQ), issue a TCS certificate (Form 27D) to each buyer and reconcile it all so the credit reflects correctly against your buyers’ PANs. The rules have also changed recently, the TCS on sale of goods over ₹50 lakh was withdrawn from 1 April 2025, the higher-rate rule for non-filers was removed and the foreign-remittance threshold was raised, so applying the current position matters. We manage the whole cycle accurately, keep you penalty-free and make sure your buyers get their rightful credit. This page explains TCS compliance in full – what it is, who must collect, the rates and thresholds, deposit and return deadlines, certificates, costs, common mistakes and the questions Vasai-Virar businesses ask us. Read on or jump to the section you need.
TCS Rates and Thresholds (FY 2025-26)
TCS rates vary by item under Section 206C. These reflect the current position; always confirm the latest, as rates and thresholds change with each Budget (a valid PAN is required or a higher rate applies under Section 206CC).
| Transaction | Section | Indicative rate |
|---|---|---|
|
Scrap |
206C(1)
|
1% |
|
Timber & other forest produce
|
206C(1)
|
2% |
|
Tendu leaves
|
206C(1)
|
5% |
|
Alcoholic liquor for human consumption
|
206C(1)
|
1% |
|
Mineral, coal, lignite, iron ore
|
206C(1)
|
1% |
|
Motor vehicle above notified value
|
206C(1F)
|
1% |
|
Notified luxury goods above notified value
|
206C(1F)
|
1% |
|
Lease of parking lot / toll plaza / mine / quarry
|
206C(1C)
|
2% |
|
LRS remittance (other purposes) above threshold
|
206C(1G) |
20% |
|
LRS remittance (education/medical) above threshold
|
206C(1G) |
5% |
When TCS Is Not Collected - Form 27C
TCS on certain goods is meant to catch trading, not manufacturing or processing. So a buyer who purchases eligible goods (like scrap) for use in manufacturing, processing or producing articles rather than for trading can furnish a declaration in Form 27C to the seller and in that case TCS is not collected on those goods. The seller must obtain the declaration and file it with the tax authority within the prescribed time. Handling Form 27C correctly is important: collect it where it applies, keep it on record and file it, so you neither wrongly collect TCS nor face a default for not collecting. We manage the 27C process as part of your compliance.
The TCS Compliance Cycle - What's Involved
TCS compliance is a repeating monthly-and-quarterly cycle. Here’s everything it involves, all of which we handle.
- TAN: you need a Tax Deduction and Collection Account Number to collect and deposit TCS; we help obtain it if you don't have one.
- Correct collection: collecting the right rate on the right transactions, with PANs captured and Form 27C handled.
- Timely deposit: depositing the collected TCS with the government by the monthly due date via challan.
- Quarterly return (27EQ): filing the TCS return for each quarter with the collection and deposit details.
- Certificate (27D): issuing a TCS certificate to each buyer so they can claim their credit.
- Reconciliation: matching collection, deposit, returns and buyer credits so everything ties up.
- Corrections: filing correction statements where needed to fix errors or mismatches.
- Notice handling: responding to any short-collection, late-payment or default notices.
TCS Deposit and Return Due Dates
TCS runs on strict monthly deposit and quarterly return cycles. Meeting them is what keeps you free of interest and late fees (always confirm the current dates).
Deposit of TCS
TCS collected in a month is generally deposited by the 7th of the following month, through the prescribed challan (with the government’s own collections following the applicable rule). Depositing late attracts interest, so we track and meet each monthly deposit.
Quarterly return (Form 27EQ) and certificate (Form 27D)
| Quarter | Period | 27EQ due date (indicative) | 27D certificate |
|---|---|---|---|
|
Q1 |
April – June |
15 July |
Within 15 days of filing
|
|
Q2 |
July – September |
15 October |
Within 15 days of filing
|
|
Q3 |
October – December |
15 January |
Within 15 days of filing
|
|
Q4 |
January – March |
15 May |
Within 15 days of filing
|
Consequences of TCS Non-Compliance
Getting TCS wrong carries real, stacking costs. The main ones:
- Interest for late/short collection: interest applies from when TCS was collectible until it's collected.
- Interest for late deposit: interest applies from collection until the tax is actually deposit
- Late-filing fee: a daily fee applies for filing the 27EQ return late.
- Penalty for non-collection: a penalty (e.g., under Section 271CA) can equal the tax not collected.
- Deemed assessee-in-default: failing to collect or deposit makes you a defaulter with recovery exposure.
- Buyer's credit blocked: if you don't file/deposit correctly, your buyer can't claim the TCS credit.
Benefits of Professional TCS Compliance
Outsourcing TCS to us removes the risk and the routine and keeps everyone, the department and your buyers satisfied.
| Benefit | Description |
|---|---|
|
Correct collection |
The right rate on the right transactions, with PANs and 27C handled. |
|
No interest |
On-time deposit every month avoids interest for delay. |
|
No late fees |
27EQ returns filed on time avoid daily late-filing fees. |
|
Avoid penalties |
Correct collection avoids 271CA and default exposure. |
|
Current-law accuracy |
The 206C(1H) withdrawal and non-filer changes applied correctly. |
|
Buyer credit protected |
Accurate filing so your buyers get their TCS credit. |
|
TAN sorted |
We help obtain a TAN if you don’t already have one. |
|
Form 27D issued |
Certificates issued to buyers promptly after each quarter. |
|
Form 27C managed |
Manufacturing-use declarations collected and filed correctly. |
|
Reconciliation |
Collection, deposit, returns and credits all tied up. |
|
Corrections handled |
Correction statements filed to fix any mismatch. |
|
Notice handling |
Short-collection and default notices responded to. |
|
No missed deadlines |
Monthly deposits and quarterly returns tracked for you. |
|
Clean records |
Organised documentation for audit and scrutiny. |
|
Time saved |
The whole routine cycle handled off your plate. |
|
Fewer errors |
Experienced filing avoids the common mistakes. |
|
Vendor/buyer goodwill |
Buyers get timely credit and certificates. |
|
Cash-flow clarity |
Predictable, planned TCS deposits. |
|
Scales with volume |
Handling that grows with your transaction volume. |
|
Peace of mind |
A recurring obligation simply managed. |
|
Expert on call |
Someone to answer any TCS question quickly. |
|
One-stop with TDS & tax |
TCS alongside your TDS, GST and income-tax compliance. |
What Is TCS (Tax Collected at Source)?
TCS is a tax that the seller of certain specified goods collected from the buyer at the time of sale, in addition to the sale value and deposits with the government. It’s governed by Section 206C of the Income Tax Act. The idea is to bring specified, often cash-heavy or high-value, transactions into the tax net at the point of sale – the seller acts as a collecting agent for the government and the tax collected is credited to the buyer, who can adjust it against their own tax liability (much like TDS).
So if you sell scrap worth a certain amount, you collect a small percentage as TCS on top of the price, deposit it against the buyer’s PAN, and the buyer sees that credit in their Form 26AS and can claim it in their return. As the collector, you carry the compliance burden: collecting the right amount, depositing it on time, filing the quarterly return and issuing the certificate. Get it right and it’s a smooth, routine process; get it wrong and the interest, penalty and buyer-credit problems make it painful, which is exactly why professional handling helps.
TCS vs TDS - the difference
| Aspect | TCS | TDS |
|---|---|---|
|
Who acts |
The seller collects
|
The payer deducts
|
|
When |
At the time of sale/receipt
|
At payment or credit
|
|
On what |
Specified goods/transactions (206C)
|
Specified payments
|
|
Return form |
Form 27EQ
|
24Q / 26Q / 27Q
|
|
Certificate |
Form 27D
|
Form 16 / 16A |
Why TCS compliance matters for a Vasai-Virar business
For traders and businesses in the Vasai-Tarapur belt especially those dealing in scrap, timber, minerals or vehicles. TCS is a real, recurring obligation. Getting it wrong is costly on two fronts: you face interest for late deposit, a penalty for non-collection or non-filing, and a ‘deemed default’ status and your buyer can’t claim the credit if you don’t file correctly, which damages relationships. Because TCS runs on strict monthly and quarterly cycles, staying compliant needs a system, which is what we provide, so you collect the right amount, file on time and keep both the department and your buyers happy.
Get TCS Compliance Done Without the Hassle
Share you detail. We will advise you on next steps.
Who Must Collect TCS?
TCS applies to sellers and specified persons dealing in the goods and transactions notified under Section 206C. You’re generally required to collect TCS if you deal in:
Scrap
A very common TCS item for many trading and manufacturing businesses.
Timber & forest produce
Timber (obtained by any mode) and other forest produce.
Foreign remittances (LRS)
Authorised dealers and tour operators (a specialised category).
Alcoholic liquor
For human consumption, and tendu leaves.
High-value motor vehicles
Sale of a motor vehicle above the notified value.
Notified luxury goods
Specified luxury items above the notified value (e.g., certain watches)
25 TCS Compliance Mistakes to Avoid
These errors cost interest, penalty and buyer-credit problems. We prevent every one.
| Mistakes | Description |
|---|---|
|
Not collecting where required |
Missing TCS on scrap, timber, vehicles and other specified goods. |
|
Still collecting on sale of goods |
Applying the withdrawn 206C(1H) TCS after 1 April 2025. |
|
Charging non-filer higher rate |
Applying the removed 206CCA higher-rate rule. |
|
Wrong rate |
Using the incorrect rate for the item. |
|
Not capturing PAN |
Short-collecting because PAN wasn’t obtained (206CC). |
|
Ignoring Form 27C |
Collecting TCS where a manufacturing-use declaration applies. |
|
Not filing 27C on time |
Failing to submit collected 27C declarations to the authority. |
|
Late deposit |
Depositing TCS after the monthly due date, incurring interest. |
|
Wrong challan details |
Errors that mispost the deposit. |
|
Late 27EQ return |
Filing the quarterly return late and paying a daily fee. |
|
Errors in 27EQ |
Wrong PANs, amounts or codes causing mismatches. |
|
Not issuing Form 27D |
Buyers left without a certificate to claim credit. |
|
No reconciliation |
Collection, deposit and returns not tied up. |
|
No TAN |
Attempting TCS compliance without a TAN. |
|
Buyer PAN mismatch |
Credit failing to reflect against the buyer. |
|
Ignoring correction statements |
Leaving errors unfixed and mismatches open. |
|
Missing rate/threshold changes |
Not applying the latest Budget changes. |
|
Treating TCS like TDS |
Confusing the two and using wrong forms. |
|
Collecting on the wrong base |
Not computing TCS on the correct value (incl. GST where applicable). |
|
No records |
Poor documentation for audit or scrutiny. |
|
Ignoring notices |
Not responding to short-collection or default notices. |
|
DIY portal errors |
Small filing mistakes an expert would avoid. |
|
Not depositing government cases correctly |
Missing the without-challan rule where it applies. |
|
Overlooking luxury-goods TCS |
Missing newer notified luxury-goods obligations. |
|
Assuming it doesn’t apply |
Not checking applicability for your goods at all. |
Why Choose Digital Vasai Tax for TCS Compliance
We’re a local Vasai-Virar practice handling income tax, GST, TDS, accounting and compliance under one roof. For TCS specifically, here’s what sets us apart.
Current-law accuracy
Full-cycle handling
Deadline discipline
Buyer-credit focus
PAN & 27C management
Notice handling
TAN support
Transparent fees
One-stop compliance
Current-law
accuracy
Full-cycle
handling
Deadline
discipline
Buyer-credit
focus
PAN & 27C
management
Notice
handling
TAN
support
Transparent
fees
Why Customer Trust Us
Businesses rely on us because their TCS is simply handled collected right, deposited on time, filed accurately, certificates issued quarter after quarter, with no interest, no penalties and no buyer complaints. We stay current with the frequent rule changes, keep everything reconciled and documented, reply quickly on call and WhatsApp and connect TCS to your wider compliance. Making a fiddly, deadline-driven obligation effortless is what earns lasting trust.
Businesses We Help
We handle TCS for every kind of collector.
| Business Type | Typical TCS focus |
|---|---|
|
Scrap dealers
|
TCS on scrap sales (206C(1))
|
|
Timber & forest-produce traders
|
TCS on timber and forest produce
|
|
Mineral traders
|
TCS on coal, lignite, iron ore
|
|
Liquor businesses
|
TCS on alcoholic liquor, tendu leaves
|
|
Automobile dealers
|
TCS on high-value motor vehicles (206C(1F))
|
|
Luxury-goods sellers
|
TCS on notified luxury goods
|
|
Lessors of parking/toll/mines
|
TCS under 206C(1C)
|
|
Manufacturers with scrap sales
|
Scrap TCS and Form 27C management
|
|
Companies with TCS obligations
|
Full-cycle 27EQ and 27D
|
|
Any specified collector
|
Correct collection, deposit and filing
|
Get TCS Compliance Done Without the Hassle
Share you detail. We will advise you on next steps.
How We've Helped
1. A Tarapur scrap dealer with late deposits and fees
Problem:
A scrap dealer was collecting TCS but depositing late and filing 27EQ after the due date, accumulating interest and late fees.
Solution:
We set up a monthly deposit routine, reconciled the collections and filed the quarterly returns on time with correct buyer PANs.
Outcome:
Interest and late fees stopped, and buyers began receiving their credit reliably.
2. A Vasai manufacturer over-collecting after a rule change
Problem:
A manufacturer was still collecting TCS on sales of goods over Rs.50 lakh after the 206C(1H) provision was withdrawn.
Solution:
We updated their process to stop the withdrawn collection, corrected the position and handled Form 27C for genuine manufacturing-use buyers.
Outcome:
Compliant, current-law collection with no unnecessary TCS and cleaner buyer relationships.
3. An automobile dealer with buyer-credit mismatches
Problem:
A vehicle dealer’s TCS wasn’t reflecting in buyers Form 26AS due to PAN errors in the returns.
Solution:
We identified the PAN mismatches, filed correction statements and reissued the Form 27D certificates.
Outcome:
Buyer credits appeared correctly, resolving complaints and future-proofing the process.
TCS Myths and the Truth
Myth 1
"TCS still applies to all sales over Rs.50 lakh."
Truth
The sale-of-goods TCS (206C(1H)) was withdrawn from 1 April 2025.
Myth 2
"I must charge non-filers a higher TCS rate."
Truth
The higher-rate-for-non-filers rule (206CCA) was removed from 1 April 2025.
Myth 3
"PAN doesn't matter for TCS."
Truth
No PAN means a higher rate under Section 206CC.
Myth 4
" I don't need a TAN for TCS."
Truth
A TAN is required to collect and deposit TCS.
Myth 5
"Late deposit is no big deal."
Truth
It attracts interest from collection to deposit.
Myth 6
"I can file 27EQ whenever."
Truth
Late filing attracts a daily late-filing fee.
Myth 7
"Small collectors are ignored."
Truth
All collectors must comply; defaults are pursued.
Myth 8
"Once filed, mistakes can't be fixed."
Truth
Correction statements fix errors and mismatches.
Myth 9
"TCS is charged on value excluding GST."
Truth
It's generally on full consideration, including GST.
Myth 10
"It's too complex to bother with."
Truth
With a proper system it's a routine, manageable cycle.
Conclusion
TCS Compliance is an important statutory obligation for businesses required to collect tax at source on specified transactions under the Income Tax Act. Timely collection, accurate deposit, proper return filing and issuance of the necessary certificates help you remain compliant, avoid interest and penalties and ensure smooth business operations.
Our TCS Compliance services cover every aspect of the compliance process from identifying applicable transactions and calculating the correct TCS amount to depositing tax, filing TCS returns, issuing certificates and maintaining complete documentation. We ensure that every requirement is handled accurately and within the prescribed timelines, reducing the risk of errors and regulatory issues.
With our professional guidance and proactive support, you can confidently meet your TCS obligations while focusing on your core business activities. Partner with us for reliable, timely and hassle-free TCS Compliance services that keep your business compliant and ensure complete peace of mind.
Need Expert
Guidance
FAQs
What is TCS (Tax Collected at Source)?
TCS is a tax that the seller of certain specified goods collects from the buyer at the time of sale over and above the sale price and deposits with the government. It’s governed by Section 206C of the Income Tax Act and applies to items like scrap, timber and forest produce, minerals, alcoholic liquor, high-value motor vehicles, notified luxury goods, certain leases and foreign remittances under the LRS. The seller acts as a collecting agent; the tax collected is credited to the buyer, who can adjust it against their own tax. We handle the full TCS cycle for businesses across Vasai-Virar.
What does your TCS compliance service include?
The entire monthly-and-quarterly cycle. We assess which of your transactions attract TCS and at what rates, set up your TAN and a clean collection process (PAN capture, Form 27C), guide correct collection on each sale, prepare the challan and deposit by the monthly due date, reconcile collections against buyer PANs, file the quarterly Form 27EQ return, issue Form 27D certificates to your buyers, file correction statements for any error, respond to any notice and keep you updated on rule changes. We tie the whole thing into your books and income-tax filing.
How is TCS different from TDS?
They’re mirror mechanisms. With TDS, the “payer deducts” tax at the time of payment or credit on specified payments (salary, rent, fees), reports it in Forms 24Q/26Q/27Q and issues Form 16/16A. With TCS, the “seller collects” tax at the time of sale on specified goods under Section 206C, reports it in Form 27EQ and issues Form 27D. One is on payments, the other on collections. Confusing the two and using the wrong forms is a listed mistake. We handle both, so whichever applies to your business is covered correctly.
Why does TCS compliance matter for my business?
Because getting it wrong is costly on two fronts. You face interest for late deposit, a penalty for non-collection or non-filing and a ‘deemed default’ status with recovery exposure and your buyer can’t claim the credit if you don’t file correctly, which damages relationships. For traders in the Vasai-Tarapur belt dealing in scrap, timber, minerals or vehicles, TCS is a real, recurring obligation on strict monthly and quarterly cycles. Staying compliant needs a system, which is exactly what we provide, so you collect right, file on time and keep both the department and your buyers happy.
Why outsource TCS instead of handling it in-house?
Because TCS is fiddly, deadline-driven and the rules change often and the interest, late fees and penalties from mishandling it usually far exceed the compliance cost. In-house, it’s easy to apply a withdrawn rule, miss a monthly deposit, file 27EQ late or leave a buyer’s credit blocked by a PAN error. We stay current with the frequent rule changes, collect at the right rate, deposit and file on time, issue certificates, reconcile everything and handle any notice. You get a routine obligation made effortless, with your buyers’ credit protected.
Who has to collect TCS?
Sellers and specified persons dealing in the goods and transactions notified under Section 206C. For example, scrap dealers, timber and mineral traders, liquor businesses, automobile dealers (on high-value vehicles), sellers of notified luxury goods and those leasing parking lots, toll plazas, mines or quarries. Authorised dealers and tour operators collect TCS on LRS remittances and overseas tour packages. If you deal in any of these, you generally need a TAN and must collect, deposit and file TCS. We assess your applicability and set up a compliant collection.
I sell scrap, do I need to collect TCS?
Yes, scrap is one of the most common TCS items, under Section 206C(1), at an indicative 1%. If you sell scrap (whether you’re a trader or a manufacturer selling your scrap), you’re generally required to collect TCS from the buyer, deposit it, file 27EQ and issue Form 27D, unless the buyer furnishes a valid Form 27C declaring the scrap is for manufacturing use. We set up correct scrap-TCS collection, manage the 27C declarations and run the full cycle so your scrap sales stay compliant.
I sell high-value vehicles, does TCS apply?
Yes. The sale of a motor vehicle above the notified value attracts TCS under Section 206C(1F), at an indicative 1%. Automobile dealers are a core TCS-collector category and buyer-PAN accuracy matters because a PAN error blocks the buyer’s credit and generates mismatch complaints. We handle vehicle-sale TCS end to end, correct collection above the notified value, accurate 27EQ filing with buyer PANs and 27D certificates, so your buyers reliably get their credit.
Do luxury-goods sellers have to collect TCS?
Yes, notified luxury goods above the notified value attract TCS under Section 206C(1F), at an indicative 1% and this is a newer obligation many sellers overlook. Overlooking luxury-goods TCS is a listed mistake precisely because it’s recently notified. If you sell specified luxury items (such as certain watches) above the threshold, we set up correct collection, filing and certificates so a new obligation doesn’t become an unnoticed default.
Do I collect TCS on foreign remittances (LRS)?
If you’re an authorised dealer or tour operator, yes, TCS under Section 206C(1G) applies to LRS remittances and overseas tour packages above the threshold, at an indicative 20% for most purposes and 5% for education/medical remittances. It’s a specialised category with its own thresholds (the foreign-remittance threshold was also raised recently). We handle LRS TCS for authorised dealers and tour operators, applying the current thresholds and rates so remittance collection is correct.
Do small collectors really have to comply?
Yes, it’s a myth that small collectors are ignored. All collectors dealing in specified goods must comply and defaults are pursued regardless of size. A small scrap dealer or a single high-value vehicle sale carries the same obligation as a large trader. Assuming TCS “doesn’t apply to me” without checking is itself a listed mistake. We assess your applicability honestly and set up compliance scaled to your volume, so a small operation isn’t caught out by an obligation it didn’t realise applied.
What are the current TCS rates?
Rates vary by item under Section 206C, indicatively, around 1% on scrap, alcoholic liquor and minerals like coal and iron ore; 2% on timber and other forest produce; 5% on tendu leaves; 1% on high-value motor vehicles and notified luxury goods and 2% on leasing of parking lots, toll plazas, mines or quarries. For LRS foreign remittances above the threshold, it’s generally 20% for most purposes and 5% for education/medical. A higher rate applies if the buyer doesn’t furnish PAN. Rates change with each Budget, so we always apply the current figures to your transactions.
What is the TCS rate on scrap?
Scrap attracts TCS under Section 206C(1) at an indicative 1% of the sale consideration. It’s one of the most common TCS items, especially for trading and manufacturing businesses in the Vasai-Tarapur belt. The rate assumes a valid buyer PAN; without one, a higher rate applies under Section 206CC. And where the buyer furnishes a valid Form 27C (manufacturing use), no TCS is collected. We apply the correct scrap rate, manage PAN and 27C, and collect accurately.
What are the different Section 206C sub-sections?
The main ones on your rate table: 206C(1) covers goods like scrap, timber, tendu leaves, liquor and minerals; 206C(1C) covers leasing of parking lots, toll plazas, mines and quarries; 206C(1F) covers high-value motor vehicles and notified luxury goods and 206C(1G) covers LRS foreign remittances and overseas tour packages. Each has its own rate and threshold. Getting the right sub-section (and rate) for your transaction is central to correct collection, we map each of your transaction types to the correct provision.
Is TCS collected on the amount including GST?
Generally yes, TCS is computed on the full sale consideration received from the buyer, which typically includes GST and other charges, unless a specific provision or clarification states otherwise. It’s a myth that TCS is charged excluding GST. This is a common point of confusion and getting the base right matters, because collecting on the wrong amount leads to short or excess collection either of which causes problems. We apply the correct computation base for each transaction type, factoring in any specific relief where it applies.
What if the buyer doesn't furnish a PAN?
Without a valid PAN, a higher TCS rate applies under Section 206CC, so short-collecting because a PAN wasn’t captured is a listed mistake and it also means the credit can’t post to the buyer. It’s a myth that PAN doesn’t matter for TCS. We capture and validate buyer PANs at the point of collection, so you apply the correct (not higher) rate and the credit flows to the right buyer avoiding both a short-collection default and a blocked credit.
Has TCS on sale of goods been removed?
Yes. The TCS that used to apply on the sale of goods exceeding ₹50 lakh in a year (Section 206C(1H)) was withdrawn with effect from 1 April 2025, because it overlapped with the TDS on purchase of goods under Section 194Q. So ordinary goods sellers who were collecting TCS on that basis no longer need to. Continuing to apply the withdrawn 206C(1H) collection is now a listed mistake. We apply the current position so you don’t wrongly continue a withdrawn collection.
I'm still collecting TCS on goods over ₹50 lakh, is that wrong now?
Yes, that collection should have stopped from 1 April 2025, when Section 206C(1H) was withdrawn. Continuing it means you’re collecting TCS your buyers don’t owe, which creates unnecessary friction and a position that needs correcting. It’s a common post-change error. We update your process to stop the withdrawn collection, correct the position and handle Form 27C for any genuine manufacturing-use buyer bringing you to clean, current-law collection.
Do I still have to charge non-filers a higher TCS rate?
No, the rule requiring higher TCS from non-filers of income tax returns (Section 206CCA) was removed with effect from 1 April 2025. You no longer need to check a buyer’s return-filing history before collecting, which removes a compliance step each transaction. Still applying the removed 206CCA higher rate is a listed mistake. We’ve built this change into your process, so you’re not doing a check that’s no longer required, while the separate no-PAN higher rate under 206CC still applies.
What changed for TCS in 2025 that I should know about?
Three things, all from 1 April 2025: the sale-of-goods TCS over ₹50 lakh (Section 206C(1H)) was withdrawn (it overlapped with 194Q TDS on purchases); the higher-rate-for-non-filers rule (Section 206CCA) was removed and the foreign-remittance (LRS) threshold was raised. Applying last year’s position on any of these leads to wrong collection, over-collecting on goods, applying a removed rate or using an old remittance threshold. We apply the current FY 2025-26 position across the board, so your collection reflects the rules that actually apply now.
What does the full TCS compliance cycle involve?
A repeating monthly-and-quarterly cycle: hold a TAN; collect the right rate on the right transactions (with PANs captured and Form 27C handled); deposit the collected TCS by the monthly due date via challan; file the quarterly return (Form 27EQ) with collection and deposit details; issue a Form 27D certificate to each buyer; reconcile collection, deposit, returns and buyer credits; file correction statements where needed and respond to any notice. We handle every step of this cycle, so nothing is missed between collection and the buyer’s credit.
Do I need a TAN for TCS?
Yes. To collect and deposit TCS and file TCS returns, you need a TAN (Tax Deduction and Collection Account Number) the same identifier used for TDS. If you already deduct TDS, you’ll have one; if you’re newly liable to collect TCS and don’t have a TAN, you must obtain it (attempting TCS without a TAN is a listed mistake). TCS deposits and 27EQ returns are made against the TAN and it’s quoted on the certificates. We help you obtain a TAN if you don’t have one and link all your TCS compliance to it.
What is Form 27EQ?
Form 27EQ is the quarterly TCS return a collector must file, reporting the details of TCS collected and deposited during the quarter including buyer PANs, amounts and challan details. It’s filed for each quarter (April–June, July–September, October–December, January–March) by the prescribed due dates. Accurate 27EQ filing is essential because it’s what posts the TCS credit against each buyer’s PAN, errors cause the credit to fail to reflect. We prepare, reconcile and file your 27EQ on time and correct any errors through correction statements.
What is Form 27D?
Form 27D is the TCS certificate a collector issues to each buyer (collectee), certifying the amount of TCS collected and deposited against their PAN. It’s the buyer’s proof of the tax collected, which they use to claim the credit in their income tax return. Form 27D is issued shortly after each quarterly 27EQ return is filed. Issuing it correctly and promptly is an important part of compliance and of keeping good relations with buyers, who need it to claim their credit. We generate and issue the certificates as part of the cycle.
What is Form 27C?
Form 27C is a declaration a buyer gives to the seller when they’re buying eligible goods (like scrap) for use in manufacturing, processing or producing articles rather than for trading. Where a valid 27C is furnished, the seller does not collect TCS on those goods. The seller must obtain the declaration and file it with the tax authority within the prescribed time. Handling 27C correctly matters: it prevents wrongly collecting TCS from genuine manufacturers, but the declarations must be collected, kept and filed properly. We manage the 27C process for you.
Why does Form 27C matter so much?
Because it sits at the line between wrongly collecting and wrongly not collecting both of which cause problems. TCS on goods like scrap is meant to catch “trading”, not manufacturing; a manufacturer-buyer who furnishes a valid 27C shouldn’t have TCS collected. But you must obtain the declaration, keep it on record and file it with the authority within the prescribed time, ignoring 27C or not filing it on time, are both listed mistakes. We collect, record and file 27C correctly, so you neither over-collect from genuine manufacturers nor face a default for under-collecting.
What's your TCS process from start to finish?
We confirm which transactions attract TCS and at what rates, set up your TAN and a clean collection process (PAN capture, 27C), guide correct collection on each sale, prepare the challan and deposit by the monthly due date, reconcile collections/deposits/buyer PANs before filing, file Form 27EQ accurately and on time, generate and issue Form 27D certificates, file correction statements to fix any error, respond to any short-collection or default notice, keep you updated on rule changes and ensure your TCS position ties into your books and income-tax filing.
When must TCS be deposited?
TCS collected in a month is generally deposited with the government by the 7th of the following month, through the prescribed challan (with the government’s own collections following the applicable rule). Depositing late attracts interest from collection until actual deposit, so the monthly rhythm matters. We track and meet each monthly deposit deadline, preparing the challan with correct details, so interest for late deposit never arises.
When are the quarterly TCS returns due?
The Form 27EQ return is filed by the due dates for each quarter, indicatively around 15 July (Q1: Apr–Jun), 15 October (Q2: Jul–Sep), 15 January (Q3: Oct–Dec) and 15 May (Q4: Jan–Mar) with the Form 27D certificates issued within about 15 days of filing. These dates are prescribed and occasionally revised, so we track the current deadlines for your business and file ahead of them, so late-filing fees never arise.
When must I issue the Form 27D certificate?
Form 27D is issued to each buyer shortly after the quarterly 27EQ return is filed, indicatively within about 15 days of the return. Prompt issuance matters because your buyers need the certificate (and the credit in their 26AS/AIS) to claim the tax you collected. Not issuing 27D leaves buyers without proof and generates complaints. We issue every certificate on schedule as part of the quarterly cycle, so your buyers can claim their credit without chasing you.
What if I miss a TCS deposit or return deadline?
Act quickly, late deposit attracts interest from collection until deposit and a late 27EQ return attracts a daily late-filing fee that accrues until you file. The sooner it’s regularised, the smaller the cost. We can file overdue returns, deposit outstanding collections, compute the exact interest and fee so there are no surprises and put a tracked monthly-and-quarterly routine in place so you stay current. If you’ve slipped, the priority is getting it deposited and filed correctly now.
What happens if I don't comply with TCS rules?
Non-compliance carries stacking costs: interest for collecting or depositing late, a daily late-filing fee for a delayed 27EQ return and a penalty (for example under Section 271CA) that can equal the tax not collected. You can also be treated as an assessee-in-default, exposing you to recovery. Crucially, if you don’t file or deposit correctly, your buyer can’t claim the TCS credit, which damages relationships. All of this is avoidable with correct collection, timely deposit and accurate filing, the system we run for you.
What is the Section 271CA penalty?
Section 271CA is the penalty for failing to collect TCS where required and it can equal the amount of tax you failed to collect. So a non-collection isn’t just a missed step; it can cost you the full uncollected amount as a penalty, on top of interest and default status. It’s one of the costliest TCS slips. Correctly identifying every TCS-liable transaction (and handling 27C properly) is how we keep you clear of 271CA exposure.
What is "assessee-in-default" for TCS?
If you fail to collect or deposit TCS as required, you can be treated as a ‘deemed assessee-in-default’ meaning the department can recover the amount from you, with interest, and pursue enforced recovery. In effect, the uncollected or undeposited liability crystallises against your business. Timely, correct collection and deposit keep you clear of this status. We run the cycle so you’re never treated as in default.
What interest applies to TCS defaults?
Two kinds: interest for late/short collection (from when TCS was collectible until it’s collected) and interest for late deposit (from collection until the tax is actually deposited). Both accrue until regularised and add to your cost. It’s a myth that late deposit is “no big deal.” We collect at the point of sale and deposit by the 7th of the next month, so neither interest arises and where a past default exists, we compute the correct interest precisely rather than overpaying.
How does non-compliance hurt my buyers?
Directly. If you don’t file 27EQ accurately or deposit on time, the TCS you collected doesn’t reflect in your buyer’s Form 26AS/AIS, so they can’t claim the credit in their return and they’ll come back to you about it. A PAN error or a late/incorrect return is the usual cause. Since your buyers paid that TCS on top of the price, a blocked credit is a real grievance. We file accurately with correct PANs and issue 27D on time, so your buyers reliably get what they’re entitled to.
How do I make sure my buyers get their TCS credit?
The buyer’s credit depends entirely on you filing the 27EQ return accurately with the correct buyer PAN and amount and depositing the TCS on time, after which it reflects in the buyer’s Form 26AS and AIS, with Form 27D as their certificate. The most common reason credit fails is a PAN error or a late/incorrect return. We capture PANs correctly at collection, reconcile before filing, file accurately and on time, issue certificates and fix any mismatch through correction statements so your buyers reliably get the credit they’re entitled to.
My buyer says the TCS credit isn't showing, what's wrong?
Usually a PAN error in the return, or a late/incorrect 27EQ, so the collected TCS didn’t post to the buyer’s 26AS/AIS. The fix is a correction statement with the right PAN and details, plus reissuing the Form 27D. We diagnose exactly why the credit isn’t reflecting, file the correction, and reissue the certificate, so the credit appears and the complaint is resolved. (This is a common reason automobile and scrap sellers first come to us.)
Can TCS return errors be corrected after filing?
Yes, it’s a myth that once filed, mistakes can’t be fixed. Correction statements fix errors and mismatches in a filed 27EQ, such as wrong buyer PANs, amounts or codes. Leaving errors unfixed (ignoring correction statements) is a listed mistake that keeps buyer credits blocked and mismatches open. We file the necessary correction statements to fix any error and reissue affected 27D certificates, so the record is corrected and the credit flows.
Can you fix past TCS errors and clean up my position?
Yes. If TCS was collected wrongly, deposited late, filed with errors, or buyer PANs were incorrect, we regularise the position filing correction statements to fix mismatches, reissuing Form 27D certificates and advising on any interest or fee payable. We can also stop a withdrawn collection (like the sale-of-goods TCS) that’s still being applied and respond to any short-collection or default notice. Cleaning up past errors and putting a correct process in place going forward is a common way clients start with us.
Will you handle TCS notices and defaults?
Yes. If a short-collection, late-payment or default notice arises, we respond to it, reviewing the default, filing the necessary correction statement, arranging payment of any genuine interest or fee and resolving the matter. Many TCS defaults trace back to fixable PAN or challan issues or to applying a withdrawn rule. Handling notices is part of the full-cycle service, so a default doesn’t sit and grow. (For deeper default resolution we also offer dedicated TDS/TCS notice handling.)
What records should I keep for TCS?
Keep your TAN details, buyer PANs, sale and collection records, Form 27C declarations received, challans for deposited TCS, filed 27EQ returns and copies of the Form 27D certificates issued. These support your collection and are essential for audit, scrutiny or resolving any mismatch. Poor documentation is a listed mistake. We maintain organised records of your collections, challans, returns, 27C declarations and certificates as part of the service, so everything is audit-ready.
Do government collectors follow a different rule?
Yes, government collectors can follow a different deposit rule (for example, a “without challan” route where it applies) and missing that rule is a listed mistake. The standard 7th-of-next-month challan deposit applies to most business collectors, but the applicable rule for government collections differs. We apply the correct deposit mechanism for your specific collector category, so the deposit is made the right way.
Isn't TCS too complex to bother with?
No, it’s a myth that it’s too complex to handle. With a proper system, TCS is a routine, manageable monthly-and-quarterly cycle: collect at the right rate, deposit by the 7th, file 27EQ each quarter, issue 27D. The complexity people fear comes from doing it ad hoc and keeping up with rule changes, which is exactly what we take off your plate. We turn a fiddly, deadline-driven obligation into a handled routine, so it never becomes a source of interest or penalty.
Won't handling TCS myself save money?
Rarely, the interest, late fees and penalties from mishandled TCS usually far exceed the compliance cost and a blocked buyer credit costs you goodwill on top. DIY risks applying a withdrawn rule (206C(1H)), missing a monthly deposit, filing 27EQ late or leaving buyer PANs wrong. Any one of these can cost more than years of the fee. Because clean filing also protects your buyers’ credit, professional handling is typically a clear net saving, not an expense.
Will you tell me honestly if TCS doesn't apply to me?
Yes. Part of the value is an honest applicability check, if your goods or transactions genuinely fall outside Section 206C, we’ll tell you plainly rather than set up a collection you don’t need (and we’ll stop a withdrawn collection like the sale-of-goods TCS if you’re still running it). Equally, if TCS does apply and you’ve been assuming it doesn’t, we’ll flag that before it becomes a default. A straight applicability answer is where we start.
Is my information kept confidential?
Yes. Everything you share your TAN, buyer PANs, sale records, challans and returns is kept strictly confidential and used solely to run your TCS compliance. We work only on the official systems, keep organised records and acknowledgements and manage the matter discreetly. Handling your business and buyer data responsibly and privately is central to how we work.
How much does TCS compliance cost?
It depends on your transaction volume and scope, the number of TCS transactions and buyers, the four quarterly 27EQ filings, certificate issuance and reconciliation plus a one-time TAN application if you need one, all at a fixed professional fee agreed upfront (plus 18% GST). The TCS itself is collected from your buyers and deposited to the government, not part of our fee. Because the interest, late fees and penalties from mishandled TCS usually far exceed the cost and clean filing protects buyer credit, it’s a clear net saving.
Can a business outside Vasai-Virar use your service?
Yes. TCS deposits and 27EQ returns are filed on the national portal, so we can manage TCS compliance for businesses across the Vasai-Virar and Palghar region, the wider Mumbai Metropolitan Region and beyond, entirely online. You share your transaction and buyer details digitally and we handle collection guidance, deposits, quarterly returns, certificates, reconciliation and any notices remotely. For local businesses including the scrap, timber and mineral traders of the Vasai-Tarapur belt, we’re also happy to meet in person at our office on Mahatma Gandhi Road, near T.B. College. Distance is no barrier.
Why should I trust Digital Vasai Tax with my TCS?
Because your TCS simply gets handled collected right, deposited on time, filed accurately, certificates issued, quarter after quarter with no interest, no penalties and no buyer complaints. We stay current with the frequent rule changes (the 206C(1H) withdrawal, the 206CCA removal), manage PAN capture and Form 27C, reconcile and document everything, respond to any notice, reply quickly on call and WhatsApp and connect TCS to your TDS, GST and income-tax compliance under one roof. Making a fiddly, deadline-driven obligation effortless is what we do.
