SECTION 206C(1H) OF INCOME TAX ACT,1961


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SECTION 206C(1H) OF INCOME TAX ACT,1961

 

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. This section becomes operative from 1st October 2020.

 Provided that if the buyer has not provided the Permanent Account Number or the Aadhar 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.

Points to be noted:

·         For the time being the rate on above TDS is 0.075% instead of 0.1% 

·         The section is applicable from 1st October 2020. 

·         This provision would be applicable on such sellers whose Turnover exceeded Rs. 10 Crores in F.Y. 2019-20. 

·         Every Seller who has received any amount as sale consideration above Rs. 50 Lakhs has to collect additional 0.075% of Bill Amount, Collect PAN and pay TCS every month. 

·         Deposit the tax collected during the month to the credit of Central Government on or before 7th of subsequent month. 

·         File the return of TCS on a quarterly basis on or before the 15th Day from the end of quarter in with tax was collected except for March quarter which is 15th May. 

·         Issue TCS certificate in form 27D to the buyer within 15 day from the filing of return in form 27EQ. All these due dates have been summarized in Annexure 2. 

·         If the seller fails to collect the tax at specified rates or fails to pay the tax collected to the Government, he shall be liable for interest at the rate of 1% per month (or part thereof) from the date of collection to date of payment.  

·         If the seller fails to furnish the quarterly return in form 27EQ on or before the due date , he shall be liable to pay late fees of Rs. 200 per day till the default continues subject to maximum of tax collected during the quarter. 

·         Seller is not required to collect TCS if the seller is exempted by the Central Government by any notification in this regard or the buyer is as follows: 

(a) Central Government, State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign state , or

(b) A local authority

(c) Any other person exempted by the Central Government

 

 

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