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Below attached file provides analysis of Section 206C(1H) of Income Tax Act,1961.

Kindly go through the analysis and provide your valuable insights.

Analysis of Section 206C(1H) of Income Tax Act,1961

  • In Case PAN not furnished then 1% rate applicable.
  • This Provision shall not apply in case when Buyer is liable to deduct TDS on goods purchased by him.
  • Here Seller shall mean : A person whose total Sales > 10 Crores during FY immediately preceding the FY in which Sales is carried out. Eg : Sales of 20-21. Turnover of 19-20 to be
  • Turnover Shall mean Turnover of Both “Goods & Services”
  • For threshold limit of 50 Lakhs Per Customer, Turnover relating to Services need not to be
  • TCS cannot be reversed in case of Issuance of Credit Note. Buyer can take credit of same in Advance tax liability.
  • TCS has to be collected on Amount of Sale Including GST.
  • TCS would not be required to be collected on Sales made prior to 1st Oct 2020 but TCS would be collected on Amount outstanding as on 30th Sep 2020 of individual customer in case Turnover exceeds 50 Lakhs .
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6 Comments

  1. RODEC PHARMACEUTICALS PVT. LTD. RODEC PHARMACEUTICALS PVT. LTD. says:

    if we are charging TCS to party under section 206C(1H) in F.Y. 2020-2021.
    TCS deduction will be continue in F.Y 2021-2022.
    Or we have consider fresh limit of 50 lacs to party for new F.Y.

      1. Dhruv Bansal says:

        Dear Kasimsoni,

        In respect to your query, here the law clearly states that “in respect of sale of goods” the section shall be applicable.
        Hence, service shall be deemed to be out of scenario in such a case.

  2. JYOTI BISHT says:

    SIR
    I HAVE QUARRY RELATED TCS IF MY COMPANY DEAL WITH FOLLOWING PRODUCTS
    1 TIMBER
    2 PLYWOOD
    3 PARTICULAR BOARD
    4 PVC STRIPS
    5 FLUSH DOOR
    6 LAMINATE
    TCS IS APPLICABLE ON TIMBER UNDER SEC 6CC BUT IS TCS APPLICABLE ON REMAINING ABOVE PRODUCT
    2 MY SECOND QUARRY IS IF MY COMPANY DEDUCT OLD TCS IS NEW TCS 206(1H) IS APPLICABLE ON US
    3 IS WE FILE OR MAINTION 27C FORM DETAIL ANY SITE MEAN IS 27C FILE

    1. Dhruv Bansal says:

      Dear Jyoti Bisht,

      Ans to Query (1) : Yes TCS is applicable on Other Products as mentioned by you if they are a product of forest produce U/S 1 & If they are not covered U/S 1 they will be covered U/S 1(H).

      Ans to Query (2) : Yes the provisions of New TCS will be applicable from 1/10/2020 regardless of old provisions if your company is falling under the provisions of such section.

      Ans to Query (3) : Your query is not totally clear to us, but as far as we understood, yes you can file Form 27C i.e. Declaration under sub-section (1A) of section 206C of the Income-tax Act, 1961 to be made by a buyer for obtaining goods without
      collection of tax.

      *Note : Views are subject to contradictions from other Author’s.

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