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Section-206C-of-the-Income-tax-Act-for-Collection-of-tax-at-source

 

Section 206C of the Income tax Act for Collection of tax at source

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6
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Introduction-
Section 206C of the Income tax Act for Collection of tax at source will be charged on following items with their rates are as under-
A. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. 206C-

(1) 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 any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:

List of specified Items with their rates for collecting of TCS-

S. No.

Nature of Goods

Percentage

1.

Alcoholic liquor for human consumption

1 %

2.

Tendu leaves

5 %

3.

Timber obtained under a forest lease

2.5%

4.

Timber obtained by any mode other than under a forest lease

2.5%

5.

Any other forest produce not being timber or Tendu leaves

2.5%

6

Scrap#

1 %

7.

Minerals like lignite, coal and iron ore

1 %

# Scrap means a waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons;

   
B. In case of Parking lot, Toll Plaza, Mining and quarrying-

(1C) Every person, who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company (hereafter in this section referred to as "licensee or lessee") for the use of such parking lot or toll plaza or mine or quarry for the purpose 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 in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such licence, contract or lease of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:

S. No.

Nature of Goods

Percentage

1.

Parking lot

2 %

2.

Toll plaza

2 %

3.

Mining and quarrying*

2 %

* Mining and quarrying shall not include mining and quarrying of mineral oil ("mineral oil" includes petroleum and natural gas)

   
C. In case of sale of Bullion and Jewellery etc.

(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, on sale consideration as income-tax,—

S. No.

Nature of Goods

Percentage

1.

Bullion, exceeds Rs.  2,00,000/-

1 %

2.

Jewellery, exceeds Rs. 5,00,000/-

1 %

 

(1F) The transactions are sale of a motor vehicle of value exceeding Rs.10 lakh, and receipt of money for sale of goods or provision of services exceeding Rs.2 lakh. In such cases, besides the sale price, the seller is required to collect an additional 1% from the purchaser, and pay it to the government.

   
Seller means-
  • The Central Government or
  • A State Government or
  • Any local authority or
  • Corporation or
  • Authority established by or under a Central, State or Provincial Act,or
  • Any company or
  • Firm or
  • Co-operative society
  • An individual or a Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which the goods of the nature specified in the Table in sub-section (1) 19[or sub-section (1D)] are sold.

 

Buyer means-

a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the Table in sub-section (1) or the right to receive any such goods but does not include,—

(A) a public sector company, the Central Government, a State Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or

(B) a buyer in the retail sale of such goods purchased by him for personal consumption;

 

Application for certificate for collection of tax at lower rates under sub-section (9) of section 206C

37G. (1) An application by the buyer or licensee or lessee for a certificate under sub-section (9) of section 206C shall be made in Form No. 13 electronically,—

 (i)  Under digital signature; or

(ii)  Through electronic verification code.

(2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the furnishing of Form No.13 ;

   
Form 13-

FORM 13 is an application form for lower/nil deduction of TDS u/s 197. The said form to be submitted with his jurisdictional Assessing Officer, along with the following details is as under-

  DownLoad Form 13
  • Name and PAN
  • Details regarding the purpose for which the refund is being received
  • Details of income of last three years and the projected current year’s income
  • Details of payment of tax of last three years
  • Details of tax deducted/paid for the current year
 
Certificate for collection of tax at lower rates from buyer under sub-section (9) of section 206C.

[37H. (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 37G is satisfied that existing and estimated tax liability of a person justifies the collection of tax at lower rate, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (9) of section 206C for collection of tax at such lower rate;

(1A) The existing and estimated tax liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following, namely:—

 (i)  tax payable on estimated income of the previous year relevant to the assessment year;

(ii)  tax payable on the assessed or returned or estimated income, as the case may be, of the last four previous years;

(iii) existing liability under the Act and the Wealth-tax Act, 1957 (27 of 1957);

(iv) advance tax payment, tax deducted at source and tax collected at source for the relevant assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 37G.]

(2) The certificate given under sub-rule (1) shall be valid for the assessment year specified in that certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.

(3) An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate given under sub-rule (1).

(4) The certificate shall be valid only for the person named therein.

(5) The certificate shall be issued direct to the person responsible for collecting the tax under advice to the buyer who made an application for issue of such certificate.]

[(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificate under sub-rule (5) and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate.]

 



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