# Section 206C(1C) - TCS on Lease/Licence

## Scope

TCS Rate: 2%

TCS shall be collected by every person who grants a lease/licence or enters into a contract/transfers any right or interest in any:

To another person (other than a public sector company) for use of such facility for purposes of business.

## Exclusions from "Mining and Quarrying"

Mining and quarrying excludes:

So lease of petroleum/natural gas mining sites is NOT subject to 206C(1C).

Worked example

### Example 1

Example: ABC Municipal Corporation leases a parking lot to Public Sector Company XYZ for ₹50 lakhs. Is TCS u/s 206C(1C) applicable?

Answer: No. Section 206C(1C) excludes lessees who are public sector companies. So no TCS is required.

### Example 2

Example: A coal mine is leased to a private company for ₹2 crores. Is TCS applicable?

Answer: Yes. TCS @ 2% on ₹2 crores = ₹4 lakhs must be collected by the lessor.

⚠️ Common exam mistakes

Applying 206C(1C) to mineral oil (petroleum/natural gas) mining — these are excluded
Collecting TCS when lessee is a public sector company
Confusing this with 206C(1) which deals with sale of minerals, not leasing of mines

Reference: 206C(1C) — Income Tax Act, 1961

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Section 206C(1C) - TCS on Lease/Licence of Parking, Toll, Mine, Quarry

Worked example