Section 206CC

Section 206CC — the law in short

What the courts have decided on section 206CC, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Srirangapattinam Desigan Srinivasan v DCIT (CPC-TDS) High CourtHelps taxpayerValidity unconfirmed
  I bought a flat, deducted one per cent under s.194-IA, and CPC has hit me with a demand because the seller's PAN was not linked to Aadhaar. Is there a High Court decision I can put in front of the officer?
  Yes. The Madras High Court disposed of a writ against exactly such a demand by holding that nothing survived for adjudication once Circular No. 6/2024 applied and the department had itself reprocessed the statement and reported no defaults. The judgment is worth having chiefly because it reproduces Circular No. 6/2024 in full, with its file number and date, which is otherwise hard to source.
• Parul Sharma v ITO (TDS), Noida ITATHelps taxpayerValidity unconfirmed
  The CIT(A) refused me the benefit of the PAN-Aadhaar circular because he said I was relying on the wrong circular. Is there a Tribunal order that simply directs the officer to apply the extended date?
  Yes. The Delhi Bench set aside both the s.200A intimation and the CIT(A) order and directed the Assessing Officer to give the assessee the extended benefit of the CBDT circular of 23 April 2024 and pass a fresh order. It is a short order and the relief is a direction to apply the circular, not a deletion of the demand outright.
• Statutory position — s.206AB and s.206CCA omitted, and s.206C(1H) disapplied, from 1 April 2025 CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  Do I still have to run the compliance check and deduct at the higher non-filer rate, and does my client still have to collect TCS on his sales of goods?
  No to both, for anything on or after 1 April 2025. Section 206AB and section 206CCA were omitted by the Finance Act 2025 with effect from 1 April 2025 and no longer exist. Section 206C(1H) has not been omitted from the statute book, but a third proviso inserted by the Finance Act 2025 provides that nothing contained in that sub-section shall apply from 1 April 2025, and the department's own guidance states that the provisions of s.206C(1H) are not applicable from that date and that s.194Q applies to the sale of goods.
• Statutory position — s.206C(1G): TCS on LRS remittances and overseas tour packages as the sub-section stands from 1 April 2025 CBDT Circulars & InstructionsCuts both ways
  My bank has collected TCS on the money I sent abroad for my daughter's university fees, and my travel agent has collected on the tour package. What does s.206C(1G) actually require, and at what rate and threshold?
  Section 206C(1G) puts the collection duty on two people: an authorised dealer who receives an amount for remittance from a buyer remitting under the Reserve Bank's Liberalised Remittance Scheme, and a seller of an overseas tour programme package who receives any amount from the buyer of the package. The main charge is five per cent, collected at the time of debiting the amount payable by the buyer or at the time of receipt, whichever is earlier; the first proviso disapplies collection by an authorised dealer where the amount or aggregate of amounts remitted by a buyer in a financial year is less than ten lakh rupees, and the second proviso raises the rate to twenty per cent on the amount in excess of ten lakh rupees where the remittance is for purposes other than education or medical treatment.
• Statutory position — s.206C(1F): one per cent on a motor vehicle above ten lakh rupees, extended to other notified goods CBDT Circulars & InstructionsCuts both ways
  I sell cars. When must I collect one per cent under s.206C(1F), and does it now catch anything besides motor vehicles?
  Sub-section (1F) requires every person being a seller who receives any amount as consideration for the sale of (i) a motor vehicle, or (ii) any other goods as may be specified by the Central Government by notification in the Official Gazette, of the value exceeding ten lakh rupees, to collect one per cent of the sale consideration from the buyer at the time of receipt of such amount. The second limb — 'any other goods, as may be specified by the Central Government by notification' — was brought in by Act No. 15 of 2024 with effect from 1 January 2025 (footnote 22 on the departmental page).
• Statutory position — s.206CC: the higher TCS rate where the collectee gives no PAN, and the twenty per cent cap CBDT Circulars & InstructionsCuts both ways
  My buyer will not give me his PAN. At what rate do I have to collect, and is there any ceiling?
  Section 206CC(1) requires a collectee to furnish his PAN to the collector, failing which tax is collected at the higher of twice the rate specified in the relevant provision and five per cent. A proviso caps the rate: 'the rate of tax collection at source under this section shall not exceed twenty per cent.' That cap matters most on s.206C(1G), where twice the twenty per cent rate would otherwise produce forty per cent.
• Statutory position — section 139AA(2) and rule 114AAA: what an inoperative PAN actually does, and the CBDT circulars that undo it CBDT Circulars & InstructionsCuts both ways
  CPC has raised a short-deduction demand on me because my payee's PAN was inoperative for want of Aadhaar linking. What exactly does an inoperative PAN do, and is there any Board relief?
  An inoperative PAN carries four consequences and only four, and rule 114AAA(3) lists them: no refund of tax is made, no interest is payable on that refund for the period, tax deductible under Chapter XVII-B is deducted at the higher rate under section 206AA, and tax collectible under Chapter XVII-BB is collected at the higher rate under section 206CC. The third and fourth of those fall on the DEDUCTOR or COLLECTOR, not on the person who failed to link, which is why the demand lands on someone who did nothing wrong. The Board has issued a sequence of circulars relieving the deductor where the PAN is made operative by a date, and the sequence — Circular No. 3/2023 dated 28 March 2023, Circular No. 6/2024 dated 23 April 2024 and Circular No. 9/2025 dated 21 July 2025 — is the first thing to check, before any argument on merits.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.