Form 27EQ is gone. The real story is six rates moving — three up, three down.

FY 2026-27 is the first year in which a seller who collects tax at source — on scrap, on liquor, on an overseas tour package, on a Liberalised Remittance Scheme transfer — reports it on a new form, under a new section number, at a new rate on six of the nine categories. None of that is a scope expansion. It's a renumbering plus a rate reshuffle, and the cuts are larger than the rises.

What actually changed on 1 April 2026

The Income-tax Act, 2025 (Act 30 of 2025) received assent on 21 August 2025 and, under its own Section 1(3), came into force on 1 April 2026 — the same day it repealed the Income-tax Act, 1961. Tax collected at source, which sat in Section 206C of the 1961 Act, is now Section 394 — the successor provision inside the new Act, not a notification laid on top of the old one. Alongside it, the Income-tax Rules, 2026 (G.S.R. 198(E), 20 March 2026) came into force the same date and carry every form number, statement and deposit deadline a collector now operates against.

Two things follow: Q1 FY 2026-27 has already been filed on the new numbering, and a March 2026 collection is still a 1961-Act, Form 27EQ collection — the trigger is the date of debit or receipt, not the date you process the entry.

Form 27EQ is now Form 143

Rule 219(1) of the Income-tax Rules, 2026 sets out which quarterly statement each deduction or collection provision reports into. Its Table, Sl. No. 4, routes every Section 394(1) collection into FORM NO. 143 — headed, in the notified Rules themselves, "Quarterly statement of collection of tax at source under section 397(3)(b)". Worth being precise about what the Rules actually say and don't: nowhere do they use the words "Form 143 replaces Form 27EQ". That mapping is an inference — the same collection obligation, reported into a form under the corresponding new provision — not quoted text.

The due-date calendar for Form 143 stands on its own and doesn't need a before-and-after to be useful: rule 219(4) fixes 31 July, 31 October, 31 January and 31 May for the quarters ending 30 June, 30 September, 31 December and 31 March respectively. That is the same rule 219(1) table, and the same rule 219(4) dates, that Forms 138, 140 and 144 (the TDS statements) run on — one calendar, four statement types, not a separate TCS clock.

The rates: six of nine changed, and it's not a one-way tightening

Section 394(1)'s Table has nine rows. What moved is column D — the rate — on six of them, substituted by Section 85 of the Finance Act, 2026 with effect from the same 1 April 2026 commencement date, and unchanged as at 31 August 2026. Read the direction carefully: this is a reshuffle, not a scope expansion and not a uniform increase.

The Table rate is not always the whole rate: section 2(9) of the same Finance Act adds a surcharge (10/15/25/37% above ₹50 lakh) for the classes of collectee named in its own column C. Those classes are drafted around non-resident status and are easy to misread — read section 2(9) before applying a flat rate to a non-resident collectee.

Add it up and the honest headline is: liquor, scrap and minerals go up (1% to 2%); tendu leaves, LRS-for-education-or-medical and overseas tour packages go down — the last one sharply, from as much as 20% to a flat 2% . If you've heard this described as TCS "tightening" or "expanding to more categories", that's not what happened on the rate side — the same receipt types the old Section 206C already covered are just renumbered and re-tabled and, on two-thirds of the rows, re-rated. One quirk worth flagging: Form 143's own collection-code table (codes 1088/1089) still labels overseas tour packages "up to threshold limit" and "above threshold limit" — a split the flat 2% rate no longer has. That's the form lagging the rate change in its code descriptions, not evidence of two live rates.

The notified-goods list isn't new, and "luxury" isn't a legal term

Section 394(1) Sl. No. 6(b) — "any other goods, as may be notified by the Central Government" — currently points at ten items: wrist watches, art pieces, collectibles, yachts/boats/helicopters, sunglasses, handbags, shoes, sportswear, home theatre systems, and horses for racing or polo, each taxed at 1% where sale consideration exceeds ₹10 lakh. Press coverage often calls this the "luxury goods TCS" list, but that word appears in none of the underlying instruments . The actual notification is S.O. 1825(E), dated 22 April 2025, under the old Section 206C(1F)(ii) — more than eleven months before the Income-tax Act, 2025 even commenced. It carries forward into FY 2026-27 through the savings clause at Section 536(2)(j) of the new Act, which deems a notification issued under the repealed Act to continue under the corresponding new provision; no fresh Section 394 notification naming these ten goods has been traced in the e-gazette as of 31 August 2026. The reconciliation problem is practical, not legal: most sales ledgers are coded by accounting class, not by "is this a wristwatch or a handbag" — so finding the population that should have collected TCS under this row usually means a manual product-category pull.

Certificate and deposit dates: two clocks, a month apart

The TCS certificate — the successor ground to Form 27D, by the same mapping — is now Form 133 under rule 215(1) Sl. No. 4, due within fifteen days of the rule 219(4) statement date. It's derived, not fixed: file Form 143 late for a quarter and every Form 133 for that quarter is automatically late too.

Deposit is a separate deadline under rule 218: generally seven days from month-end, but for collections made in March, the deadline is 30 April — a full month before the 31 May statement date for the same quarter. That gap is where interest accrues unnoticed: cash can be deposited on time and the statement still filed weeks later, and the two dates don't check each other automatically in most AP systems.

This is not GST TCS — the two regimes don't reconcile against each other

It's easy to see "TCS" in a quarterly return and assume it's the same mechanism as the TCS an e-commerce operator collects under Section 52 of the CGST Act . It isn't. Everything above — the Section 394 table, Form 143, Form 133, rule 218 deposit dates — sits inside the Income-tax Act and lands as a credit against income tax, via the collectee's Annual Information Statement. The GST-side regime is genuinely separate: a marketplace operator collects a percentage of net taxable supplies, reports it monthly in GSTR-8, and the credit lands in the seller's electronic cash ledger, not their income-tax account. A seller can be inside both at once — a marketplace vendor also selling a notified good above ₹10 lakh, say — and the two reconciliations still don't offset, don't share a period, and don't share a form.

What breaks in AP if this quarter's remap doesn't happen

The failure mode mirrors the TDS-side renumbering: the arithmetic of collecting tax at the right rate is unaffected by any of this, but the reference data around it — the section code on the vendor or customer master, the Form 143 collection code (1068 through 1092), the certificate the collectee is chasing — now downloaded as Form 133, not built locally as Form 27D — is exactly what a rate-times-base check cannot see. A collection filed under the wrong form series, or against a stale collection code, doesn't just create a rejected statement on your side. It's painful to trace back manually once the buyer is asking why their Form 133 certificate — and the credit it's meant to support — hasn't shown up a full quarter after the sale, and by then the collector is reconstructing hundreds of invoices instead of just fixing one master row.

The same three-way discipline that catches a TDS remap failure catches this one: reconcile the collector's books, the rule 218 deposits, and the accepted Form 143 statement every quarter, not just at year end — and run a collection-code census the way you'd run a section-code census on the TDS side (see the TDS remap playbook). Where TCS and GST reconciliation sit in the same monthly close, it's alongside the broader GST reconciliation cycle — parallel, not merged.

Checklist before the next quarterly statement

• Remap every Section 394(1) row on your collector master to its FY 2026-27 rate — six of nine changed, and three of those six went down, so don't assume "renumbering year, rates went up".
• Model the carve-outs as reason codes, not notes. Sections 394(2), 394(4) and 394(5) switch collection off entirely — a resident buyer's declaration, a buyer who already deducted TDS, and similar cases — and Form 143 reports each as a flag (Notes 1–7: B, K, F, Y and others). A master that only carries rates cannot produce them, and the result reads as under-collection when it isn't.
• Repoint the Form 143 collection code (1068–1092) for every receipt type you collect on, especially the ten notified-goods codes (1076–1085) if you sell any of them above ₹10 lakh.
• Separate the two March deadlines — 30 April deposit, 31 May statement — on your close calendar, not as one line item.
• Confirm Form 133 has actually issued for every collectee with a Section 394 collection in the quarter, within fifteen days of the rule 219(4) statement date.
• Don't let a TCS reconciliation and a GST reconciliation share a workpaper. They're different Acts, different returns, and different ledgers even when the same vendor sits in both.

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