The 60-second version
Section 206CD requires seller to collect 1% TCS on sale of motor vehicle when sale value exceeds ₹10 lakh — returning NRIs running dealerships must file Form 27EQ quarterly.
206CD is 1% TCS on motor vehicle sale above ₹10 lakh — collect at invoice before registration handoff
Section 206CD applies when seller receives consideration for motor vehicle exceeding ₹10 lakh — collect 1% TCS and deposit via challan.
Returning NRIs operating car dealerships must obtain buyer PAN, file quarterly Form 27EQ, and issue TCS certificate.
Penalty lane: Section 206CA guide if collection missed.
Motor vehicle TCS matrix
| Section | Trigger | Rate | Form |
|---|---|---|---|
| 206CD | Vehicle > ₹10L | 1% | 27EQ |
| 206C(1H) | Goods receipts > ₹50L | 0.1% | 27EQ |
| 206CA | Failure to collect | Penalty | Revise 27EQ |
| 194Q | Buyer purchase goods | 0.1% TDS | 26Q |
206CD compliance
Check value
Sale > ₹10 lakh.
Collect 1%
TCS on consideration.
Buyer PAN
Mandatory quote.
File 27EQ
Quarterly statement.
TCS cert
Issue to buyer.
Flow
206CD kit
- TAN active.
- Buyer PAN.
- Invoice breakup.
- 27EQ filed.
- TCS challan.
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Used cars
206CD applies to dealer sale of motor vehicle — verify if transaction is dealer vs individual transfer.
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Threshold?
₹10 lakh sale value per motor vehicle transaction.
vs 206C(1H)?
206CD is vehicle-specific 1%; 206C(1H) is 0.1% on goods receipts above ₹50L FY threshold.
Individual seller?
206CD applies to seller in course of business — not casual one-off personal car sale.
206CA?
Penalty if TCS not collected — see 206CA guide.
GST?
TCS on consideration excluding GST if charged separately.
RNOR?
Collection obligation applies if you are liable collector under 206CD.
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.