Tax Collection at Source (TCS) on scrap sale @ 2% as per Section 394 (1) of Income-Tax Act, 2025: Railway Board Order

Tax Collection at Source (TCS) on scrap sale @ 2% as per Section 394 (1) of Income-Tax Act, 2025: Railway Board Order dated 17.06.2026

भारत सरकार GOVERNMENT OF INDIA
रेल मंत्रालय MINISTRY OF RAILWAYS
रेलवे बोर्ड (RAILWAY BOARD)

No.2018/RS(S)/709/14pt1

New Delhi, dt. 17.06.2026

Principal Chief Materials Manager,
All Zonal Railways & PUs.

Sub: Tax Collection at Source (TCS) on scrap sale.

Ref: Railway Board’s letter No.2018/RS(S)/709/14 25.10.2018

Tax Collection at Source (TCS) rate applicable for scrap has been revised to @ 2% as per Section 394 (1) of Income-Tax Act, 2025 (as amended by Finance Act, 2026). Further, Form No. 127 (earlier Form No. 27C) is required for declaration u/s 394(2) of the Income-tax Act, 2025 to be made by a buyer for obtaining goods without collection of tax.

2. In view of above, the following is informed:

(i) Tax Collection at Source (TCS) rate applicable for scrap sale through e-Auction (sale) module as well as through direct sale is revised to @ 2% as per section 394 (1) of Income-Tax Act, 2025 (as amended by Finance Act, 2026).

(ii) Form No. 127 to be introduced in place of earlier Form No. 27C for declaration u/s 394(2) of the Income-tax Act, 2025 to be made by a buyer at the time of making payment of Balance Sale Value (BSV) for obtaining goods without collection of tax.

3. Further, in this regard, all other provisions of the Income-Tax Act, 2025 (as amended by Finance Act, 2026) should be followed.

4. This issues with the concurrence of Finance Directorate/Railway Board.

Sd/-
(Shiva Kant Mishra)
Director Railway Stores (M)
Railway Board,
Tel No. 011-23307521
Email ID: drsm[at]rb.railnet.gov.in

Copy to : General Manager(D)/EPS, CRIS, for necessary action.