Section 206C(1H) of Income Tax Act

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Overview of Section 206C(1H) of Income Tax Act

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 Rs.50 Lakhs in any previous year, other than the goods covered in

  • sub-section (1) or
  • sub-section (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 Rs.50 Lakhs as income-tax.

Also Read: Highlights of RACP Bill, 2020-Taxation and Other Laws Act

1st Proviso

Provided that if the buyer has not provided the Permanent Account Number or
the Aadhaar number to the seller, then the provisions of clause (ii) of sub-section (1)
of section 206CC shall be read as if for the words “5%.”, the words “1%.” had been substituted.

i.e. If buyer has not provided PAN or Aadhar number to seller, then the rate of TCS will be 1% instead of 5%.

2nd Proviso

Provided further that the provisions of this sub-section shall not apply, if the
buyer is liable to deduct tax at source under any other provision of this Act and has
deducted such amount.

Also Read: How to revise Income Tax Return in India

Explanation: For the purposes of this sub-section,–

(a) “buyer” means a person who purchases any goods, but does not include

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,
  • the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or
  • a local authority as defined in the Explanation to clause (20) of section 10; or
  • any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein;

(b) “seller” means a person whose total sales, gross receipts or turnover from the
business carried on by him exceed Rs.10 Crore during the financial year immediately preceding the financial year in which the sale of goods is carried out, not being a person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein.

Section 206C(1H) of Income Tax Act Applicability

This section becomes operative from 1st October 2020.

TCS Payment Due Date & Return

1.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.

2.Every tax collector shall submit quarterly TCS return i.e., Form 27EQ in respect of the tax collected by him in a particular quarter.

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