Taking rental car from Portugal to Spain

You are not traveling between Ill and Ind. You absolutely must notify the rental company that you are going from Portugal to Spain --- Because it may not be permitted AND there will be a substantial drop fee, if permitted. The fee could exceed the cost of the rental. That should be made clear at the time you make the reservation. Do not make assumptions. Generally, it is not recommended to rent in one country and drop in another. You will be charged for the tolls as you agreed to when picking up the car. Any questions ???? ask at the time of rental.

If rental car has a toll transponder for Portugal what happens with toll charges when we cross into Spain?

I have a 99.99% confidence that a toll transponder for Portugal, will be useless in Spain. Unless you pay as you go, I suspect the toll system in Spain will photo the car and send the bill to the owner, the rental company, and you will get the bill ( for toll fee and probably a penalty) and a service fee tacked on by the rental company..

Any questions ???? ask at the time of rental.

I suggest you get the answers long before you are at the rental counter.

I have rented a car in Portugal twice that I have taken into Spain. One company didn’t charge any extra, the other charged a few euros per day that the car was in Spain.

Of course you must let the hire company know, otherwise you will be in breach of your rental terms and your insurance will be voided.

A Portuguese transponder will not work in Spain and vice versa.

I interpreted the question as dropping a car in Spain. If it just driving in Spain that is a different question but it needs to be clear to the rental company. And there is good possibility the rental will have a GPS tracker so the rental company will know where you are and where you have been.