TCS Return: Form 27EQ Is Now Form 143, And TCS Itself Just Got Bigger

Form 27EQ has always been the quarterly return for sellers and collectors reporting Tax Collected at Source, covering everything from scrap and liquor to foreign remittances and motor vehicles. The new Act keeps the core mechanism intact but does three things at once: renumbers the form, shifts the filing deadline, and genuinely expands what TCS applies to in the first place.

Old form: Form 27EQ, filed under Section 206C of the Income Tax Act, 1961

New form: Form 143, filed under Section 394 of the Income Tax Act, 2025, read with Rule 219 of the Income Tax Rules, 2026, applicable from Tax Year 2026-27 onwards

What the Form Covers

Form 27EQ, and now Form 143, is the quarterly statement filed by any collector, meaning a seller or operator responsible for collecting tax at source, rather than deducting it. It covers a defined list of specified goods and transactions:

• Sale of scrap, timber, tendu leaves, and other forest produce
• Sale of alcoholic liquor for human consumption
• Sale of specified minerals such as coal, lignite, and iron ore
• Parking lots, toll plazas, and mining or quarrying rights
• Overseas remittances under the Liberalised Remittance Scheme and foreign tour packages
• Sale of motor vehicles above the specified value, and sale of goods generally above the annual receipt threshold

The collector, meaning the seller, collects the tax from the buyer at the time of sale, deposits it with the government, and the buyer, called the collectee, claims credit for it while filing their own return.

What Actually Changed

• Form number: 27EQ becomes 143
• Section reference: Section 206C, the long-standing home for TCS, becomes Section 394, with individual sub-provisions renumbered accordingly
• Filing deadline shifted: Form 27EQ historically followed its own due date pattern, distinct from the TDS return calendar. Form 143 is now aligned to the same quarterly due dates used for TDS returns, 31 July, 31 October, 31 January, and 31 May, removing the separate TCS filing calendar that collectors previously had to track independently
• TCS on luxury goods significantly expanded: the old Section 206C(1F) covered only motor vehicles above Rs. 10 lakh. The new Act adds an entirely new category of luxury goods with no equivalent under the old law: watches, art and collectibles, yachts, helicopters, sunglasses, designer bags, shoes, sportswear, home theatre systems, and horses purchased for activities such as polo. Final thresholds for each category are set by CBDT notification, but the obligation itself is new
• LRS threshold raised: Tax Collected at Source on remittances under the Liberalised Remittance Scheme, previously triggered above Rs. 7 lakh in a year, now applies above a Rs. 10 lakh threshold, with the education and medical-loan category taxed at a lower rate than general purpose remittances
• TCS rates raised on scrap and specified minerals: both categories move from a flat 1 percent under the old Act to a rate of up to 2 percent under the new one, with the exact rate depending on buyer type and specific category
• Certificate renumbered: Form 27D, the TCS certificate issued to the buyer, becomes Form 133

Two of these, the luxury goods category and the LRS threshold increase, are not cosmetic. They represent TCS obligations that simply did not exist, or applied differently, under the old Act.

Worked Example

Old position, Form 27EQ, applicable up to Q4 of FY 2025-26:

A luxury retailer sells a Swiss wristwatch for Rs. 18,00,000 to a customer in FY 2025-26. Under the old Section 206C, there is no TCS obligation on the sale of watches at all, regardless of price, since watches were never a notified category. The retailer collects no TCS, and the transaction is reported nowhere in Form 27EQ, since it simply falls outside the scope of the old TCS provisions.

New position, Form 143, applicable from Q1 of FY 2026-27 onwards:

The same retailer sells an identical Rs. 18,00,000 watch in the equivalent quarter of FY 2026-27. Under the new Section 394, watches above the CBDT-notified threshold now fall within the expanded luxury goods category. The retailer is required to collect TCS on the sale, deposit it with the government, issue Form 133 to the buyer as the TCS certificate, and report the transaction under the applicable payment code in Form 143 for that quarter. A transaction that carried zero TCS obligation under the old Act now creates a full compliance requirement, collection, deposit, certificate issuance, and quarterly reporting, purely because the underlying law changed.

Why This Matters for Filing

• Any client in retail dealing with high-value watches, art, yachts, designer goods, sportswear, or similar luxury categories needs a fresh review of TCS applicability starting FY 2026-27, since these were entirely outside scope before and now are not.
• Update internal filing calendars to reflect the aligned due dates. Collectors who are used to a different TCS filing rhythm from their TDS rhythm can now run both on the same quarterly schedule, which simplifies planning but also means missing one deadline now risks missing both types of returns together if the internal process is not updated.
• For clients remitting funds abroad under LRS, the threshold increase to Rs. 10 lakh means smaller remittances that previously triggered TCS may now fall below the line, but confirm the specific rate applicable to the purpose of remittance, since education and medical-loan remittances continue to attract a different, lower rate than general purpose transfers.
• Scrap dealers, mineral traders, and similar sellers should update pricing and invoicing systems for the higher TCS rate band, since collecting at the old 1 percent rate after April 2026 would under-collect and expose the collector to a shortfall demand later.

Bottom Line

Form 27EQ has become Form 143, and while the collector-collectee mechanism and quarterly filing structure remain familiar, this is one of the more substantive changes in the entire renumbering exercise. TCS now reaches an entirely new category of luxury goods that never existed under the old Act, the LRS threshold has moved, key rates have gone up, and the filing calendar itself has shifted to match TDS due dates. Any client selling high-value goods needs a fresh TCS applicability check, not just a form number update.