Today we discuss on TCS on cash transaction, Government of India has widens the provision of TCS in order to stop cash transaction in market and also to control the black money to some extend. In this blog we will discuss on various question asked on the tax collected at source like applicability of TCS,Section of TCS, liability of TCS etc.
Applicability of TCS
TCS is applicable on purchase and sale of goods in cash if bill amount more than 2 laks. TCS will be deducted if following condition has been satisfied –
1 Bill amount is Rs 2 laks or more that 2 laks.
2 Payment received in cash by Saler from the buyer of any amount if bill more than Rs 2 laks.
Example – If A sale goods to B for Rs 5 laks (invoice number 501), B paid payment to the A in five installment than TCS @ 1 percent will be deducted as bill amount is more than 2 laks.
Example If A sale goods to B for Rs 5 laks under five invoice (invoice number 501 to 505), B paid payment to the A in one installment than TCS @ 1 percent will not be deducted as bill amount is less than 5 laks.
Under which Section TCS levied in income tax?
TCS is levied as per section 206 C of the income tax the latest amendment has been done in section 206c(1d) of income tax act 1961.
Is TCS applicable if buyer is an ultimate consumer?
Yes, TCS is applicable whether buyer is a end consumer or reseller.
Who will be liable to pay the TCS?
Saler who sale the goods is liable to pay the TDS, he will charge 1% TCS from the buyer and pay to the government.
What is the rate of TCS?
Rate of TCS is 1 % for all the goods and services.
From which date TCS is applicable?
Previously TCS is applicable on only gold sale in cash but now W.E.F 01/06/2016 TCS is applicable on all the goods and services.
What is the slab rate of TCS?
|Gold and Jewellery||Rs 2 laks|
|Cars and motor vehicle||Rs 10 laks|
|Other goods and services||Rs 2 laks|
Exclusion of TCS?
If any transaction covered under TDS than TCS will not be applicable on it.
Must read our previous blog why pan card is necessary for purchase of sale of above Rs 2 laks.
Important update on the TCS –
CBDT has issued circular 23/2016 dt. 24 June 2016 on TCS
As per the circular TCS should be deducted on the cash portion only if payment received partly in cash and partly in banks, TCS will not be deducted on the cheque portion. E.g – If seller sales goods Rs 5 laks and Rs 3 laks has been received by cheque and Rs 2 laks by cash than TCS will not be applicable.
If the limit of TCS exceed Rs 2 laks than TCS will be applicable on total amounts. If seller sales goods Rs 5 laks and Rs 2 laks has been received by cheque and Rs 3 laks by cash than TCS will be applicable on 3laks.