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Section-206C-(1H)-TCS-on-sale-of-goods

 

Section 206C (1H) TCS on sale of goods

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Introduction-

The new section 206C(1H) of the Income Tax Act,1961 has been introduced by The Finance Act, 2020 for Tax Collected at Source (TCS) on sale of goods. The provision of this section has been notified & applicable w.e.f. 01.10.2020. It is applicable to all sellers of goods whose turnover for the preceding Financial Year exceeds Rs. 10 Crore Rupees.

Section 206C(1H) – Every person, being a seller , who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or subsection (1F) or sub-section (1G) shall, at the time of receipt of such amount, collect from the buyer , a sum equal to 0.1% of the sale consideration exceeding fifty lakh rupees as income-tax. The rate of 0.1% is reduced to 0.075% up to 31.03.2021.

 
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Applicability-
  • All sellers of goods whose turnover for the preceding financial year exceeds Rs. 10 Crores, then every seller who has received any amount as sale consideration during the financial year exceeds Rs. 50 Lakhs then amount over and above 50 lakhs have to collect additional 0.1% (reduced rate is 075% up to 31.03.2021) of bill value, will be value for collection of tax.
  • If the turnover below Rs. 10 Crore during the immediately preceding year then provisions of this section is not applicable.
 
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Example 1-
  • For Financial Year 2020-21- If turnover during the financial year 2019-20 was exceeds Rs. 10 Crores, then the provisions of this section will be applicable in financial year 2020-21 (w.e.f. 01.10.2020).
Example 2-
  • For Financial Year 2020-21- If turnover during the financial year 2019-20 was Rs. 9 Crores (it is not exceeding Rs. 10 Cores), then the provisions of this section are not applicable in financial year 2020-21.
   
To whom it is not applicable
  1. Central Government, State Government, an Embassy, a High Commission, Consulate, and the trade representation of foreign states.
  2. Local Authority
  3. Person importing goods
  4. Any other person as notified by the Government.
 
Due date for payment of TCS-
  • The person responsible for collecting tax shall deposit the TCS amount within 7 days from the last day of the month in which the tax was collected.
 
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Form of Return-
  • Every tax collector shall submit quarterly TCS return i.e., Form 27EQ in respect of the tax collected by him in a particular quarter.
 

Quarter

Due Date

Apr-Jun

15th July

Jul-Sep

15th Oct

Oct-Dec

15th Jan

Jan-Mar

15th May




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