TCS return: Form 143 under the 2025 Act (formerly Form 27EQ)

Who collects TCS?

Tax collected at source is charged by the seller or receiver on top of the price, and later credited to the buyer. Under the Income-tax Act 2025 the provisions sit in section 394, carried over from section 206C of the old law. Collectors include sellers of scrap, liquor for human consumption, tendu leaves, timber and certain minerals, sellers of motor vehicles and specified luxury goods above ₹10 lakh, and banks and dealers on foreign remittances and overseas tour packages above notified limits.

The general TCS on sale of goods above ₹50 lakh under old section 206C(1H) was removed from 1 April 2025, leaving TDS on purchase of goods as the single mechanism for large purchases.

Due dates: what changed

Under the 1961 Rules, Form 27EQ was due on the 15th of the month after each quarter, so the January-March 2026 statement was due by 15 May 2026. Form 143 is the successor for tax collected from 1 April 2026, and professional commentaries list it on the same calendar as TDS returns, with the July-September 2026 statement due by 31 October 2026.

Because the rules text for TCS timelines is new, confirm each quarter's date on the e-filing portal or in the Income-tax Rules 2026 before relying on it. Tax collected must be paid to the government by the 7th of the following month.

Late fee, interest and penalty

The late fee is ₹200 a day until the statement is filed, capped at the tax collected in that statement, and must be paid before the statement is processed. Interest at 1% a month or part applies where tax is not collected, or is collected but paid late. A penalty of ₹10,000 to ₹1 lakh can apply for failure to file or incorrect particulars.

A collector that fails to collect becomes liable for the tax itself, with interest. Buyers who do not get credit because of a wrong PAN or late statement will raise it with you, often at their own return time.

What data do you need?

Form 143 is buyer-wise and needs the collection code for each category, which changed to the section 394 scheme for transactions from April 2026. Keep the following for every quarter.

• Buyer or remitter name and PAN
• Amount received or debited, and date
• Collection code under section 394 and rate applied
• Tax collected and challan details for each deposit through ITNS 281N
• Lower or nil collection certificates and buyer declarations, where applicable

Common errors and consequences

Typical errors include using old section 206C codes for post-April 2026 sales, wrong PANs, collecting at the non-PAN higher rate without checking, and mixing TCS entries into a TDS return. Commentaries specifically warn that Form 143 must be filed separately and not merged with TDS statements.

After the statement is processed, certificates in Form 133 are downloaded from TRACES and issued to buyers, who use them to claim credit in their own returns. Refogo's partner professionals can prepare and file TCS returns for a fixed fee.

Step by step

1. 1Identify TCS transactions

   Tag sales and receipts covered by section 394 with the correct collection code.

2. 2Collect and deposit

   Collect TCS at the applicable rate and deposit by the 7th through ITNS 281N.

3. 3Prepare Form 143

   Use the Return Preparation Utility with buyer and challan details.

4. 4Validate and upload

   Generate the FVU file and upload through TAN login, selecting the 2025 Act and tax year.

5. 5Issue Form 133

   Download TCS certificates from TRACES and share them with buyers.