Section 206C(1H): TCS on sale of goods (no longer applies)
Section 206C(1H) of the Income-tax Act, 1961 has no equivalent in the Income-tax Act, 2025, which applies from 1 April 2026. Checked against incometaxindia.gov.in on 13 October 2026.
Section 206C(1H) at a glance
| Nature of payment | Sale of goods with aggregate consideration above Rs 50 lakh (1961 Act) |
|---|---|
| Income-tax Act, 2025 | No equivalent provision |
Conditions and exceptions
- Finance Act 2025 s.72 inserted a proviso in s.206C(1H): 'nothing contained in the provisions of this sub-section shall apply from the 1st day of April, 2025' (incometaxindia.gov.in/w/section-72-94).
- The TCS table in s.394 of the Income-tax Act 2025 (as amended by Act No. 4 of 2026) has no general sale-of-goods entry; the nearest is Sl. 6 (motor vehicles/notified goods above Rs 10 lakh, 1%) - incometaxindia.gov.in/w/section-394-6.
- Purchase-side TDS under s.393(1) Sl. 8(ii) (old 194Q) continues.
Which Act applies to your payment
The 1961 Act governs a payment if it was credited or paid on or before 31 March 2026, whichever happened first. If both happen on or after 1 April 2026, the 2025 Act applies.
Source and verification
Income Tax Department: section 206C(1H) →
Last verified on 13 October 2026. Finance Acts change TDS rates and thresholds; check the source before you deduct. This is general information, not advice for your situation.
Related
Frequently asked questions
Does section 206C(1H) still apply?
Not to payments or credits on or after 1 April 2026. The Income-tax Act, 2025 has no equivalent provision. Where a payment was credited or made on or before 31 March 2026, the 1961 Act, including section 206C(1H), still governs it.
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