The 60-second version
Section 206C(1H) requires sellers to collect 0.1% TCS on sale of goods when receipts exceed ₹50 lakh in a FY — returning NRIs running dealerships must file Form 27EQ and reconcile buyer PAN.
206C(1H) is seller-side TCS — you collect from buyer when your receipts cross ₹50 lakh in the FY
Section 206C(1H) applies when seller's receipts from sale of goods exceed ₹50 lakh in a financial year — collect 0.1% TCS on amount received above threshold from each buyer.
Returning NRIs starting trading or distribution businesses must obtain buyer PAN, file quarterly Form 27EQ, and issue TCS certificate to buyer.
Buyer TDS lane: Section 194Q guide if you also purchase goods above ₹50 lakh.
Goods collection matrix
| Section | Role | Rate | Form |
|---|---|---|---|
| 206C(1H) | Seller collects | 0.1% | 27EQ |
| 194Q | Buyer deducts | 0.1% | 26Q |
| 206CE | Buyer collects | TCS | 27EQ credit |
| 206CCA | Higher if non-filer | 5% | If buyer non-filer |
206C(1H) compliance
Track receipts
₹50L FY threshold.
Collect TCS
0.1% above threshold.
File 27EQ
Quarterly statement.
TCS cert
Issue to buyer.
Deposit
Challan by 7th.
Flow
206C(1H) kit
- TAN active.
- Buyer PAN.
- Sales register.
- 27EQ filed.
- TCS challan.
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vs 194Q
If buyer deducts 194Q TDS, 206C(1H) TCS does not apply on same transaction — verify which party is liable.
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206C(1H) vs 206CE?
206C(1H) is seller collecting on high receipts; 206CE credits TCS collected by buyer to seller — see 206CE guide.
vs 194Q?
194Q is buyer TDS on purchase; 206C(1H) is seller TCS on sale — only one applies per transaction.
Threshold?
₹50 lakh seller receipts in FY — not per-invoice.
206CCA?
5% TCS if buyer failed to file prior ITR — check buyer status.
RNOR?
TCS collection obligation applies based on seller status — file 27EQ if liable.
GST?
TCS is on consideration excluding GST if charged separately.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.