Widening the scope of section 206C to include TCS on foreign remittance through Liberalised Remittance Scheme (LRS) and on selling of overseas tour package as well as TCS on sale of goods over a limit.
Section 206C of the Act provides for the collection of tax at source (TCS) on business of trading in alcohol, liquor, forest produce, scrap etc. Sub-section (1) of the said section, inter-alia, provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of certain goods a sum equal to specified percentage, of such amount as income-tax.
TCS to be collected by seller whose turnover exceeds RS. 10 cr. In previous year from each buyer on amount exceeding 50 lacs @0.1% for sale of goods.
1. TCS means the seller shall collect from the buyer additional amount of 0.1% over and above the sale amount. Assuming sale invoice of Rs 10,00,000 – the TCS amount shall be Rs 1,000. Thus the buyer shall pay the the seller Rs 10,01,000
2. The additional amount of Rs 1,000 shall be deposited with the Government (like TDS).
3. The buyer shall get credit of this TCS in his income tax return.
4. The new law is applicable only to those sellers whose sale in last year was more than Rs 10 crores
5. TCS is not to be recovered from all buyers..It is to be recovered only from those buyers/customers to whom aggregate sale is more than Rs 50 lacs during the year.
6. The new law is applicable from April 1, 2020.
Recent Blogs:Types of ITR Forms- Which ITR You Should File for Your Business?
What is ITR-2 Form? How to File ITR-2 Online?
Difference Between Sole proprietorship and one Person Company (OPC)
How to Convert Proprietorship Firm to Private Limited Company
How to File ITR Online? A Complete Guide