Here’s a structured table summarizing the key changes to Tax Collected at Source (TCS) effective from April 1, 2025, based on the Finance Bill 2025 amendments:
TCS Changes from April 2025
| SECTION | TRANSACTION TYPE | OLD THRESHOLD/RATE (PRE-APRIL 2025) | NEW THRESHOLD/RATE (FROM APRIL 2025) | KEY NOTES |
| 206C(1G) | Remittances under LRS | ₹7 lakh threshold | ₹10 lakh threshold | No TCS below ₹10L; applies to foreign tours, gifts, investments . |
| – Education (self-funded) | 5% above ₹7L | 5% above ₹10L | Medical treatment similarly taxed . | |
| – Education (via loan) | 5% above ₹7L | Exempt (No TCS) | Applies to loans from RBI-recognized institutions . | |
| – Other purposes (investments, gifts) | 20% above ₹7L | 20% above ₹10L | Includes overseas tour packages . | |
| 206C(1H) | Sale of goods | 0.1% on sales >₹50L | Removed | Eliminates overlap with TDS under Section 194Q . |
| 206C(1F) | Luxury goods (e.g., cars, art, watches) | 1% on sale >₹10L | Expanded categories | Now covers yachts, helicopters, designer bags, etc. . |
| 206C(1) | Forest produce (timber, etc.) | 2.5% | Reduced to 2% | Excludes tendu leaves (remains 5%) . |
| 206CCA | Higher TCS for non-filers | Higher rates (e.g., 5% vs. 1%) | Section omitted | No need to verify ITR filing status of buyers . |
| 276BB | Prosecution for delayed TCS payment | Strict penalties | Exemption if paid by quarterly due date | Relief for minor delays . |
Key Takeaways :
- LRS Simplification: Higher threshold (₹10L) and education loan exemption reduce compliance burden for students/medical travelers.
- Business Ease: Removal of TCS on goods (Section 206C(1H)) and non-filer penalties (206CCA) streamlines transactions.
- Luxury Goods: New 1% TCS on high-value items targets undisclosed income .
- Forest Produce: Rate cut to 2% benefits timber traders
