Skip to content
- Finance Act, 2020 has inserted a new sub-section (1H) into section 206C of Income Tax Act, 1961 which is applicable from 1st October 2020.
- Every seller, whose total sales/gross receipts/turnover from the business carried on by him exceeds Rs. 10 Crores during the immediately preceding FY of sale of any goods, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding Rs. 50 Lakhs in any previous year other than the goods being exported out of India, shall at the time of receipt of such amount collect a sum equal to 0.1% of the sale consideration exceeding Rs. 50 Lakhs as Tax Collected at Source (TCS) from the buyer.
- However, if the buyer has not provided the PAN or the Aadhaar number to the seller, then the applicable rate of TCS will be 1%.
- Upto 31st March 2021, the reduced rate is 0.075% and 0.75% respectively is applicable.
- If the buyer is liable to deduct tax at source under any other provision of this Act on the goods purchased by him from the seller and has deducted such amount, then this provision shall not be applicable.
- If the seller is liable to collect TCS from the buyer under any other provisions of this Act such as scrap, motor vehicle exceeds Rs. 10 lakhs, etc. then, this provision shall not be applicable.
- This provision is not applicable if the buyer is the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or a local authority or a person importing goods into India or any other person as Central government may specify by notification in Official Gazette.
- TCS remission in challan ITNS 281 within 7th day of subsequent month and TDS statement to be filed quarterly in Form 27EQ. A certificate of tax collection is to be given in for 27D.
