Section 206CC of Income Tax Act: PAN Requirement for TCS Collectee
Section 206CC of the Income-tax Act, 1961 imposed a higher rate of tax collection at source where a person from whom tax was collectible did not furnish a valid Permanent Account Number to the collector. The provision operated with the TCS rules in Chapter XVII-BB and was intended to ensure correct PAN identification in tax collection transactions.
Meaning of collectee and collector
For Section 206CC, the collectee is the person paying a sum or amount on which tax is collectible at source. The collector is the person responsible for collecting that tax. The collectee was required to furnish PAN to the collector where Section 206CC applied.
Higher TCS rate where PAN was not furnished
Under Section 206CC(1), if PAN was not furnished, tax was required to be collected at the higher of the following rates:
| Basis | Rate |
|---|---|
| Rate specified in the relevant provision | Twice that rate |
| Statutory minimum under Section 206CC | 5 percent |
Declaration under Section 206C(1A)
A declaration under Section 206C(1A) was not valid for the purposes of Section 206CC unless the person furnished PAN in that declaration. If the declaration became invalid because PAN was not furnished, the collector was required to collect tax in accordance with the higher-rate rule in Section 206CC(1).
Certificate under Section 206C(9)
Section 206CC also provided that a certificate under Section 206C(9) could not be granted unless the application contained the applicant's PAN.
PAN in correspondence and documents
The collectee was required to furnish PAN to the collector, and both parties were required to indicate it in correspondence, bills, vouchers and other documents exchanged between them in relation to the transaction.
Invalid or incorrect PAN
If the PAN furnished to the collector was invalid or did not belong to the collectee, Section 206CC treated the situation as one in which PAN had not been furnished. The higher-rate provisions therefore applied in the same manner.
Non-resident without permanent establishment in India
Section 206CC(7) excluded a non-resident who did not have a permanent establishment in India. For this purpose, a permanent establishment included a fixed place of business through which the business of the enterprise was wholly or partly carried on.
Income-tax Act, 2025: TCS from 1 April 2026
The TCS provisions are consolidated under Section 394 of the Income-tax Act, 2025. For amounts debited or received on or before 31 March 2026, the applicable provisions of the Income-tax Act, 1961 continue to govern. For amounts debited or received on or after 1 April 2026, Section 394 of the Income-tax Act, 2025 applies.
For transactions on or after 1 April 2026, collectors should quote the relevant table item of Section 394 rather than an old 1961 Act TCS section number. Existing PAN and TAN numbers continue to remain valid under the Income-tax Act, 2025.
Practical compliance points
- Identify whether the transaction falls before or after 1 April 2026 before selecting the governing TCS provision.
- Obtain and verify PAN wherever required under the applicable law and rules.
- Use the correct TCS provision and table item in statements filed for transactions governed by the Income-tax Act, 2025.
- Existing PAN and TAN numbers do not need to be replaced merely because the Income-tax Act, 2025 came into force.
- For older transactions, preserve documents needed for proceedings, corrections, demands or refunds under the saved provisions of the 1961 Act.
Official Income Tax resources
For current compliance, use the Income Tax Department TDS and TCS compliance guidance, tax payment guidance, and the Income Tax e-Filing Portal.