Section 206C(1C) - TCS on Lease/License of Parking Lot, Toll Plaza, Mine or Quarry
# Section 206C(1C): TCS on Lease/License of Parking Lot, Toll Plaza, Mine or Quarry
## Scope
Applies to every person who grants a lease, licence, enters into a contract, or otherwise transfers any right or interest in:
Parking lot
Toll plaza
Mine or quarry
to another person for use for business purposes.
## Exclusion
Public sector companies as licensees/lessees are EXCLUDED — no TCS on transfers to a PSU.
## Rate
2% of the licence fee / lease rent / contract amount.
## Timing
At the earlier of:
1. Debiting the amount payable by the licensee/lessee to his account, OR
2. Receipt of such amount from the licensee/lessee.
## Who Collects?
The transferor / lessor / licensor collects TCS from the lessee / licensee / contractor.
Worked example
### Example 1
Example: State Government grants a 5-year licence over a toll plaza to ABC Pvt. Ltd. for an annual fee of ₹2 crore.
TCS u/s 206C(1C) = 2% × 2,00,00,000 = ₹4,00,000 per year
Collected at the earlier of debit or receipt.
### Example 2
Example: Municipal corporation leases a parking lot to PQR Ltd. (a state PSU) for ₹50 lakhs.
Lessee is a PSU → No TCS required.
⚠️ Common exam mistakes
Applying section 206C(1C) to leases of OTHER properties — it is restricted to parking lots, toll plazas, and mines/quarries only.
Forgetting the PSU exclusion when the lessee/licensee is a public sector company.
Confusing it with section 206C(1) — different goods/services, different rates.
Bare-Act text Section 206C(1C) · Income-tax Act, 1961 · click to expand
Section 206C(1C): Every person, who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or a quarry, to another person, other than a public sector company (licensee or lessee) for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such licence, contract or lease of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax.