New TCS provisions–w.e.f. 01.06.16:
[Section 206C(1D)]: Every “Seller” who receives any amount in cash as a consideration for sale of –
– Bullion (exceeding Rs. 2 Lacs),
– Any other goods or any service (exceeding Rs. 2 Lacs)
shall, at the time of receipt of such amount in cash, collect from the buyer, TCS @ 1% of sale consideration.
No TCS shall be required on any amount on which TDS has been made by the payer under chapter XVII-B.
‘Sale of goods’ is the charging event and therefore the provision is applicable only in case of sale transaction taking place on or after 01.06.16 i.e. sale bill raised on or after 01.06.16.
1) Seller receiving consideration for sale of Motor vehicle of value exceeding Rs. 10 Lacs (in cash or cheque), shall, collect TCS @ 1% of sale consideration. [S. 206C(1F)]
2) “Buyer” for S. 206C(1F) (i.e. buyer of Motor vehicle) shall exclude central/state Govt., embassy, high commission, consulate, trade representation of foreign state, local authority and public sector company engaged in the business of carrying passengers.
3) Tax collected at source shall be deposited within one week from the last day of the month in which collection is made.
4) Quarterly TCS statement in form 27EQ shall be required to be filed on or before 15th June, 15th, 15th Jan or 15th May as the case may be. [Rule 31AA]
5) TCS certificate in form 27D shall be furnished to the collectee on or before 30th June, 30th, 30th Jan or 30th May as the case may be. [Rule 37D]
6) ”Seller” means person whose turnover exceeds Rs. 1 Crores/ 50 Lacs in F.Y. preceding the F.Y. in which the goods are sold/ services are provided.
7) Buyer can obtain lower TCS certificate on an application in form 13 from the A.O. [S. 206C(9) r.w.r. 37G]
8) In non PAN cases (i.e. collectee not furnishing PAN to collector), rate of TCS shall be higher of – twice the specified rate or five percent. [S. 206CC(1)]
9) Pearson who fails to make TCS or after collection fails to pay the tax as required, shall be deemed to be an ‘assessee in default’. [S. 206C(6A)]
Please note that, facility of not to be treated as assessee in default due to failure to make TCS on furnishing of ROI, payment of due taxes etc. by the concerned buyer and furnishing of certificate in form 27BA by defaulter [as provided in proviso to s. 206C(6A)] is not available to persons referred to in section 206C(1D) as above!!
Some clarifications by CBDT through circular No. 22 and 23 of 2016::
– TCS u/s 206C(1D) will not be levied if the cash receipt does not exceed 2 lacs rupees even if the sale consideration exceeds Rs. 2 Lacs.
– TCS u/s 206C(1D) TCS is applicable only on cash component of the sale consideration (in case cash component exceeds Rs. 2 Lacs) and not on the whole of the sale consideration.
– Section 206C(1F) – TCS @ 1% on sale of Motor Vehicle of value exceeding Rs. 10 Lacs – applicable to retails sales only and not in case of sale by manufacturer to dealers/distributors
– Sale of Motor Vehicle of value exceeding Rs. 10 Lacs – payment in installments – 1% TCS applicable proportionately on receipt of each installment
– The provision of TCS on sale of Motor Vehicle of value exceeding Rs. 10 Lacs is not dependent on mode of payment.
– In case of sale of Motor Vehicle of value below Rs. 10 Lacs, TCS shall be levied @ 1% u/s 206C(1D) only on cash component of the sale consideration (in case cash component exceeds Rs. 2 Lacs).
– Provisions of TCS u/s 206C(1D) /206C(1F) are not applicable in case of sale of motor vehicle/any other goods/services to Govt. dept., embassies, consulates, UN institutions, etc.
Some further points for discussion (post CBDT circular 23/2016 dt. 24.06.16):
– Aggregation of cash receipts – from the language of section 206C(1D) and CBDT clarifications thereafter, it appears that TCS regime is bill wise and not party wise (irrespective of F.Y. in which bill was issued)
– Ex: If cash of say Rs. 2.5 Lacs is collected at single occasion against 2 bills of Rs. 150000/- each, then whether TCS applicable – NO
– If total cash of say Rs. 2.5 Lacs is collected at multiple occasions against 2 bills of Rs. 150000/- each, then whether TCS applicable- NO
Rule 114B: Every person shall quote his PAN in all documents pertaining to the transactions specified in the Table below, namely:- (w.e.f. 01.01.16) (relevant items are only discussed)
|1.||Sale or purchase of a motor vehicle or vehicle, as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) which requires registration by a registering authority under Chapter IV of that Act, other than two wheelers..||All such transactions.|
|5.||Payment to a hotel or restaurant against a bill or bills at any one time.||Payment in cash of an amount exceeding fifty thousand rupees.|
|6.||Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.||Payment in cash of an amount exceeding fifty thousand rupees.|
|10.||Deposit with –
(i) a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).
(ii) Post office
|(i) Deposits in cash exceeding fifty thousand rupees during any one day; or
(ii) Aggregating to more than 2.5 lacs during 09.11.16 to 30.12.16*
* Statement in form No. 61 in respect of these transactions is to be filed up to 15.01.17.
|18.||Sale or purchase, by any person, of goods or services of any nature other than those specified at Sl. Nos. 1 to 17 of this Table, if any.||Amount exceeding two lakh rupees per transaction:
(Cash or cheque)
Any person who does not have a permanent account number and who enters into any transaction specified in this rule, he shall make a declaration in Form No.60 giving therein the particulars of such transaction.
Notification No. 2/2017: A person who has an account other than time deposit/ saving account maintained with a banking company/co-operative bank, and has not quoted his PAN or furnished form No. 60, at the time of opening of such account; he should furnish his PAN or form No. 60 as the case may be, to the person specified in Rule 114C(1)(c) on or before 28.02.17. [Not. No. 2/2017]
Rule 114C: Verification of PAN / declaration in form 60 in transactions specified in rule 114B. (Applicable to persons referred to in clause (a) to Clause (k) as follows]
– (a) Registering officer under Registration Act 1908
– (b) a person who sells the immovable property or motor vehicle;
– (c)officer of a banking company or co-operative bank
– (d) post master;
– (e)stock broker, sub-broker, merchant banker, underwriter, portfolio manager, etc. registered under SEBI Act 1992
– (f)a depository, participant, etc. registered under SEBI Act, 1992 referred to at Sl. No. 4 of rule 114B
– (g) the principal officer of a company referred to at Sl. No. 3 or 4 or 8 or 12 or 13 or 15 or 16 of rule 114B;
– (h) the principal officer of an institution referred to at Sl. No. 2 or 3 or 8 or 10 or 11 or 12 or 13 of rule 114B;
– (i) any trustee or any other person duly authorised by the trustee of a Mutual Fund referred to at Sl. No. 7 of rule 114B;
– (j) an officer of the Reserve Bank of India
– (k) a manager or officer of an insurer referred to at Sl. No. 14 of rule 114B
Rule 114C (2): Any person, being a person raising bills referred to at Sl. No. 5 or 6 or 18 of rule 114B, who, in relation to a transaction specified in the said Sl. No., has issued any document shall ensure after verification that permanent account number has been correctly furnished and the same shall be mentioned in such document, or as the case may be, a declaration in Form 60 has been duly furnished with complete particulars.
Rule 114C (3): The person referred to sub-rule (1) sub-rule (2) who has received any document in which PAN is mentioned / declaration in form 60 has been furnished, shall ensure that the valid PAN or the fact of furnishing of form No. 60, is duly mentioned in the records maintained for the transactions referred to in Rule 114B and the PAN or the details of form No. 60 are linked and mentioned in any information furnished to the IT authority or any other authority under any provisions of the Act or rules. [Not. No. 2/2017]
Rule 114D: Time and manner in which persons referred to in rule 114C shall furnish a statement containing particulars of Form No. 60.
114D. (1) Every person referred to in,—
|(I)||clauses (a) to (k) of sub-rule (1) of rule 114C; and|
|(II)||sub-rule (2) of rule 114C and who is required to get his accounts audited under section 44AB of the Act,|
who has received any declaration in Form No. 60, on or after the 1st day of January, 2016, in relation to a transaction specified in rule 114B, shall–
– furnish a statement in Form No. 61
– retain Form No. 60 for a period of six years from the end of the financial year in which the transaction was undertaken.
– Six monthly submissions – 31st October and 30th April
– E-filing of form 61 for period 01.01.16 to 30.09.16 can be done on or before 30th 2016. (one time date extension)
– Statement ind form 61 in respect of the transactions listed in clause (ii) of column (3) of seria(10) of the Table under rule 114B shall be furnished_on or before 15.01.17. [Not. No. 2/2017]
Rule 114E: Furnishing of statement of financial transaction: [w.e.f . 01.04.16]
114E. (1) The statement of financial transaction required to be furnished under sub-section
(1) of section 285BA of the Act shall be furnished in respect of a financial year in Form No. 61A and shall be verified in the manner indicated therein.
|No.||Nature and value of transaction||Reporting person|
|1||(a) Payment made in cash for purchase of bank drafts or pay orders or banker’s cheque of an amount aggregating to ten lakh rupees or more in a financial year.
(b) Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to fifty lakh rupees or more in a financial year, in or from one or more current account of a person.
(Reporting person shall apply the threshold limit separately to deposits and withdrawals in respect of transaction specified above)
|A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies|
|2||Cash deposits aggregating to ten lakh rupees or more in a financial year, in one or more accounts (other than a current account and time deposit) of a person.
(Note: Aattribute the entire value of the transaction or the aggregated value of all the transactions to all the persons, in a case where the account is maintained or transaction is recorded in the name of more than one person;)
|A banking company or a co-operative bank as above or Post Master General|
|3||One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person. (Note: As above)||A banking company or a co-operative bank as above or Post Master General or Nidhi or NBFC|
|4||Payments made by any person of an amount aggregating to—
(i) one lakh rupees or more in cash; or
(ii) ten lakh rupees or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year.
|A banking company or a co-operative bank as above|
|5.||Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company).||A company or institution issuing bonds or debentures.|
|6.||Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company.||A company issuing shares.|
|7.||Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year.||A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 (18 of 2013).|
|8.||Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund).||A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.|
|9.||Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year.||Authorised person as referred to in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).|
|10||Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more.||Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act.|
|11.||Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.)||Any person who is liable for audit under section 44AB of the Act.|
|12.||Cash deposits during the period 09.11.16 to 30.12.16 aggregating to ̶
(i) 12.5 Lacs rupees or more, in one or more current account of a person; or
(ii) 2.5 Lacs rupees or more, in one or more accounts (other than a current account) of a person.
|13||Cash deposits during the period 01.04.16 to 09.11.16 in respect of accounts that are reportable under Sr. No. 12 abvoe
[Not. No. 2/2017 dt. 06.01.17]
(3) The reporting person mentioned in column (3) of the Table under sub-rule (2) (other than the person at Sl. No. 10 and Sl. No. 11 w.e.f. 06.10.16)* shall, while aggregating the amounts for determining the threshold amount for reporting in respect of any person as specified in column (2) of the said Table,—
|(a)||take into account all the accounts of the same nature as specified in column (2) of the said Table maintained in respect of that person during the financial year;|
|(b)||aggregate all the transactions of the same nature as specified in column (2) of the said Table recorded in respect of that person during the financial year;|
|(c)||attribute the entire value of the transaction or the aggregated value of all the transactions to all the persons, in a case where the account is maintained or transaction is recorded in the name of more than one person;|
|(d)||apply the threshold limit separately to deposits and withdrawals in respect of transaction specified in item (c) under column (2), against Sl. No. 1 of the said Table.|
(5) The statement of financial transactions referred to in sub-rule (1) in form 61A shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.
Provided the statement of financial transaction in respect of the transactions listed at serial number (12) and serial number (13) in the Table under sub-rule (2), shall be furnished on or before the 31st day of January, 2017.
* As per Notification No. 91/ 2016
As per sec. 285BA r.w.r. 114E(6)(a) every reporting person mentioned in column (3) of the table under sub rule (2) of rule 114E should obtain a registration number from IT Department for the purpose of filing Statement of Financial Transactions [SFT] in form No. 61A.
CBDT vide Notification No. 13 of 2016 dt. 30.12.16 explained the procedure for Registration and generation of ITD registered Entity Identification Number [ITDREIN]
– Rules relating to collection and verification of PAN / Form 60 (Rule 114B and 114C) applies to all cases (audit and non audit).
– However, in view of R 114D(1), six monthly reporting in Form 61 applies only to audit cases except seller of immovable property and motor vehicle.
– Reporting in form 61A [in case of transaction No.11 mentioned at 114E(2)] applies only to 44AB audit cases.
– The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016; clearly indicating that the said transactions did not require aggregation and the reporting requirement under Statement of Financial Transactions [SFT] for this purpose is on receipt of cash payment exceeding Rupees Two Lakh for sale of goods or services PER TRANSACTION. [CBDT press release on 22.12.16]
– Refer a summary chart attached separately.
Points to be noted after Notification No. 104 dt. 15.11.16 & 02 of 2017:
(Post insertion of clause 12 and clause 13 to Rule 114E(2)]
1. The report will include all bank accountsin a Bank to calculate the Rs 2.5/12.5 lakh limit and not in one bank account.
2. However If you have accounts in two Banks and deposited amount less than 2.5 lakh in each bank (& each entry is less than Rs 50000) then your account will not be reported.
3. The Cash deposited during 09/11/2016 to 30.12.2016 is only considered.
4. However, vide Not. No. 2/2017, in respect of the accounts which qualify for reporting on the basis of above threshold of Rs. 205 L/12.5 L, the aggregate of cash deposits between 01.04.16 to 30.12.16 shall be reported (reporting on or before 31.01.17).
5. Part (C.3) in form 61A is substituted to take care of the above amendments as follows:
|C.3.1||Aggregate gross amount credited to the account in cash|
|C.3.2||Aggregate gross amount debited to the account in cash|
|C.3.3||Aggregate gross amount credited to the account in cash from 01.04.16 to 08.11.16|
|C.3.4||Aggregate gross amount credited to the account in cash from 09.11.16 to 30.12.16|
6. Cash deposited in new currency /Small currency and Old notes 500/1000 all will be considered in this limit.
7. Cash deposit limit 2.5 is for all accounts linked with your pan in a bank like PPF account, saving account.
8. Single entry of Cash deposited >Rs 50000 PAN is required,as done earlier, to Income tax department
9. These transactions have to be reported before 31.01.2017 by a banking company or a co-operative bank as the case may be or by the Post Master General. [sub-rule 5 to section 114E has been amended whereby the statement of financial transaction (i.e. AIR) of newly listed Sl.No.(12) & Sl. No. (13)must be furnished before 31.01.2017 though the statement of financial transactions (regular AIR) in respect of other items are to be furnished by 31st May of the succeeding financial year.]
|Applicability of Rule 114B/C/D/E – A Bird’s eye view|
|Sr. No.||Nature of Transaction||TCS@1% of Cash portion
PAN on Bill
in Form 61A
|1||Single Bill below Rs. 2,00,000/-.|
|1.1||– Full Recovery in cash||NO||NO||NO|
|1.2||– Part recovery in cash||NO||NO||NO|
|1.3||– Full recovery by Cheque||NO||NO||NO|
|2||Single Bill exceeding Rs. 2,00,000/-.|
|2.1||– Full Recovery in cash on single occasion||YES||YES||YES|
|2.2||– Part recovery in cash below Rs. 2 Lacs||NO||YES||NO|
|2.3||– Part recovery in cash above Rs. 2 Lacs on single occasion||YES||YES||YES|
|2.4||– Part recovery in cash above Rs. 2 Lacs on multiple occasions but not a single receipt exceeds Rs. 2 Lacs||YES||YES||NO|
|2.5||– Full recovery by Cheque||NO||YES||NO|
|3||Multiple Bills issued during year to same person and
the aggregate bill amount exceeds Rs. 2,00,000/-. (However, not a single Bill exceeds Rs. 2,00,000/-)
|3.1||– Full Recovery in cash on single occasion||NO||NO||YES|
|– Part recovery in cash above Rs. 2 Lacs on multiple occasions but not a single receipt exceeds Rs. 2 Lacs||NO||NO||NO|
|– Part recovery in cash above Rs. 2 Lacs on single occasion||NO||NO||YES|
|3.4||– Full recovery by Cheque||NO||NO||NO|
1) Compliance at column No. (3) and (5) is applicable only to cases under audit u/s 44AB. Whereas, compliance at column No. (4) is applicable to all irrespective of audit.
2) In case of situation at (2.3), (2.4) and (3.3) above, as per form 61A para (B.3.2) and (B.3.3), aggregate gross amount received from the person during the period (including in cash, if any) and aggregate gross amount received from the person IN CASH are to be reported separately up to 31st May of the next F.Y.
3) Reporting requirement under [SFT] for the purpose of Rule 114E (11) is on receipt of cash payment exceeding Rupees Two Lakh for sale of goods or services PER TRANSACTION.
4) Before filing form 61A, reporting person should obtain ITDREIN. (CBDT Not. No. 13/2016)
4) Before filing form 61A, reporting person should obtain ITDREIN. (CBDT Not. No. 13/2016)