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TCS

SECTION 206C (1): PROFIT AND GAINS FROM BUSINESS OF TRADING IN ALCOHOLIC LIQUOR, FOREST PRODUCE, SCRAP, ETC.

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,
  • collect from the buyer
  • a sum equal to the following percentage of the purchase price, as income tax.
NATURE OF GOODSPERCENTAGE OF PURCHASE PRICE
Alcoholic liquor for human consumption1%
Tendu leaves5%
Timber obtained under a forest lease2.5%
Timber obtained by any mode other than under a forest lease2.5%
Any other forest produce not being timber or tendu leaves2.5%
Scrap1%
Minerals being coal or Lignite or iron ore1%

SECTION 206C (1C)

 

Every person, who grants a lease or a licence or enters into a contract or otherwise transfers

  • any right or interest in any parking lot or toll plaza or mine or quarry
  • to another person, other than a public sector company (herein after called as “Licensee or lessee”)
  • for the use of such parking lot or toll plaza or mine or quarry for the purposes of business shall,
  • at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee
  • or at the time of receipt of such amount from the licensee or lessee, whichever is earlier, collect from the licensee or lessee, 2% of such amount as income tax.

SECTION 206C (2)

This section shall not apply where the buyer, who is a resident in India, furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to above are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes. The person responsible for collecting tax under this section shall deliver or cause to be delivered to the Chief Commissioner or Commissioner one copy of the declaration, referred to above, on or before the 7th day of the month next following the month in which the declaration is furnished to him.

Section 206C (1D)

Every person, being a seller, who receives any amount in cash as consideration for sale of bullion or jewellery, shall, at the time of receipt of such amount in cash, collect from the buyer, a sum equal to 1% of sale consideration as income tax, if such consideration,-

  • for bullion, exceeds 2,00,000, or
  • for jewellery, exceeds 5,00,000

Section 206C (1D) shall apply irrespective of the facts whether buyer is a manufacturer, trader or purchase is for personal use.

Section 206CB-Processing of TCS returns

  • A new Section 206CB is proposed to be introduced to facilitate the processing of TCS (tax collected at source) statements on the same lines as TDS statements.
  • Section 206CB (1) permits adjustments to the sums collectible to take care of arithmetical errors or incorrect claims apparent from any information in the TCS statement filed.
  • Interest if any, payable on the sum collectible and fee payable under Section 234E are now chargeable in respect of the TCS. For this purpose, suitable provisions have been introduced in the Sections 200A and 206CB.
  • The intimation has to be sent before the expiry of one year from the end of the financial year in which the statement is filed.
  • Section 206C(7) provides for payment of interest if the person responsible for collecting the tax does not collect the tax or after collecting does not pay it as required under that Section. At the same time, since an intimation generated under Section 206CB is deemed to be a notice of demand under Section 156, interest under Section 220(2) would be payable if the tax collector fails to pay such demand within 30 days of the service of the notice of demand. This could give rise to a situation where interest is charged under both Sections, 220(2) as well as 206C (7). To avoid this, a new sub-Section (2C) is proposed to be inserted in the Section 220 to provide that where interest is charged for any period under Section 206C(7), no interest shall be charged under Section 220(2) of the Act on the same amount for the same period. These amendments are effective from 1st June 2015
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