Sitharaman proposes doubling TCS on coal, lignite to 2%

Finance Minister Nirmala Sitharaman on Sunday announced that the tax collected at source TCS rate for the sale of coal and lignite is proposed to be increased from the current one per cent to 2 per cent.

Finance Minister Nirmala Sitharaman on Sunday announced that the tax collected at source (TCS) rate for the sale of coal and lignite is proposed to be increased from the current one per cent to 2 per cent. The increase is part of a broader move to rationalise TCS rates and reduce the number of distinct rates. In her budget speech, Finance Minister Nirmala Sitharaman said ''it is proposed to reduce multiplicity of TCS rates. Also, certain TCS (tax collection at source) rates are rationalised to address the cash flow issues.'' This applies to the sale of coal, lignite or iron ore, it said. According to industry experts, the proposal comes as critical minerals like lithium gain focus, but coal and iron ore remain foundational to India's industrial growth, with coal output projected to hit 1.1 billion tonnes in FY26. Coal India accounts for over 80 per cent of domestic coal output. Coal India Ltd (CIL) has designated 2026 as the year of reform and transformation with the state-run miner focusing on higher coal output, improved quality, technology upgrades and diversification to strengthen its long-term role in India's energy landscape. India's electricity demand continues to grow at a robust pace, with coal-based power generation accounting for around 70 per cent of total electricity output. Rising industrial activity and peak power requirements have kept coal supply and evacuation critical for energy security.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)