TCS Rate Changes in Budget 2025:

TCS Rate Changes in Budget 2025 The Union Budget 2025 was presented on 1st Feb 2025 in parliament by Finance Minister Nirmala Sitharaman. This budget various changes in direct taxation. The tax rate slab changes under the new tax regime, a new 25% tax rate is introduced, a hike in the rebate limit and the rate of TDS/TCS changes. Changes in various sections of TCS (Tax Collected at Source) took place in Budget 2025. The government made an amendment in Section 206C(1), 206C(1G) and 206C(1H) of TCS. The rate applicable under these sections has been revised.

Changes in TCS Section

Changes in TCS Sections
Section	Transaction	Existing Structure	Budget 2025
206C(1)	TCS on Timber	2.50%	2%
	TCS on forest produce obtained under forest lease	2.50%	2%
206C(1G)	TCS on LRS	0% upto Rs.7,00,000	0% upto Rs.10,00,000
	TCS on LRS for education purpose (funded by loan from specified Financial Institution)	0.5% after 7 Lakh	0%
206C(1H)	TCS on sale of goods	0.10%	0%

Amendment in Section 206C as per Finance Bill 2025

TCS Sections

Section 206C (1) of the Income Tax Act mandates the collection of tax at source (TCS) on certain specified goods. The limits for TCS are defined based on the type of goods sold and the value of the transaction. For instance, TCS is applicable on the sale of items like alcohol, tendu leaves, timber, and scrap, among others. Section 206C(1G) of the Income Tax Act mandates the collection of tax at source (TCS) on Overseas Remittance and Travel under LRS and for overseas tour packages. Section 206C(1H) of the Income Tax Act requires sellers to deduct Tax Collected at Source (TCS) from the amount of money they get from selling goods to certain sellers.