TCS on sales or TDS on purchase after cross 10 cr turnover

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If your business turnover has exceeded 10 crore rupees, you need to be aware of changes to TCS and TDS rules. From April 1, 2025, the TCS requirement under Section 206C(1H) on sales exceeding 50 lakh rupees will be removed. This change aims to reduce compliance burdens and avoid overlap with TDS obligations. Instead, you may need to deduct TDS under Section 194Q on purchases exceeding 50 lakh rupees.

Nishant Gandhi

Nishant Gandhi (Querist)
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26 March 2025 Respected Expert

In this year we crossed 10 CR Turnover, kindly advise when I have to Collect TCS or deduct the TDS

further, I have to collect TCS on every sales invoice & from every customer ?

Your valuable advise shall be highly appreciated.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 March 2025 Starting April 1, 2025, the Tax Collected at Source (TCS) under Section 206C(1H) of the Income Tax Act will be removed. This provision previously required sellers to collect TCS at a rate of 0.1% on sales exceeding ₹50 lakh in a financial year. The removal is part of the Finance Bill 2025 and aims to simplify tax compliance for businesses by eliminating the overlap with Tax Deducted at Source (TDS) obligations under Section 194Q, which also applies to similar transactions.

Situation till FY 2024-25:::
TCS under Section 206C(1H) applies to a seller whose total sales, gross receipts, or turnover from business exceeded ₹10 crore in the immediately preceding financial year. It requires the seller to collect TCS at 0.1% on the sale consideration exceeding ₹50 lakh from a single buyer in a financial year.

Nishant Gandhi

Nishant Gandhi (Querist)
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26 March 2025 Thanks sir
i.e. means not to collect TCS w.e.f 1-4-25 but we have to deduct TDS 194Q on purchase of exceeding Rs. 50 lakhs

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 March 2025 Yes, correct u/s. 194Q IT act....

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 Good luck....

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