Expansion of TCS (Tax Collected at Source) Compliance under Income Tax.
Eligibility: – Sale of any goods above INR 50 Lacs; and Turnover of INR 10 Crore and above during FY 2019-20.
Law: – It is proposed to levy TCS on sale of goods as per section 206C (IT Act) at the rate of 0.1% on consideration received from buyer in excess of INR 50 Lacs in a Financial Year. However such provision would apply only if total sales, gross receipts or turnover of seller from the business carried on by it exceeds INR 10 Crore during the immediately preceding the FY. Further, In case PAN or Adhaar is not provided by the buyer, the tax would be collected at 1% instead of 0.1% by the seller.
Exceptions: – The above provision would not apply where
|S. No.||Transaction||Before 01st Oct 2020||After 01st Oct 2020|
|1||Sold goods on 15th May 2020 amounting to INR 20 Lacs and receipt consideration on 18th July 2020||No TCS||No TCS|
|2.||Sold goods on 15th October 2020 amounting to INR 10 Lacs and receipt consideration on 18th October, 2020||No TCS||No TCS|
|3||Sold goods of INR 70 Lakhs on 28th Oct, 2020 and receipt consideration on INR 55 Lacs on 05th November, 2020||No TCS||TCS will be applicable
As the aggregate value of total sales is INR 1 crore (20+10+70), exceeding the INR 50 Lakhs in the FY 2020-21
TCS will be applicable on 55 lacs on 05th November, 2020