Section 206c

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CA.Ritu Agarwal

CA.Ritu Agarwal (Querist)

17 May 2016 Please provide me the complete provision of Ammended Section 206c clause 86.

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Rupesh Jain

Rupesh Jain (Expert)

20 May 2016 if you buy car/vehicle in cash exceeds rs. 10 lacs and jewellery rs. 2 lacs and any other then tcs 1% will be collected from buyer.

CA.Ritu Agarwal

CA.Ritu Agarwal (Querist)

20 May 2016 Dear Rupesh ji. I know this., I dont want basic provision. i want provision relating to sale of other goods if made for more than 2 lakh

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Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

23 July 2025 To clarify, Section 206C of the Income Tax Act, 1961, has been amended several times to include a Tax Collected at Source (TCS) on various goods and transactions. This includes sales of certain items like cars, jewellery, and other specified goods when sold for amounts exceeding certain thresholds.

Amended Section 206C - TCS on Sale of Goods
Here’s a breakdown of the provision you're referring to, especially for goods sold for more than ₹2 lakh:

Section 206C(1) – Tax Collected at Source (TCS)
Clause 86 of Section 206C of the Income Tax Act focuses on the sale of certain goods where TCS needs to be collected. Specifically, the TCS provision applies to the following types of goods if the sale amount exceeds certain limits:

(1) Sale of Motor Vehicles (Car/Vehicle):
Threshold Limit: ₹10 lakh

TCS Rate: 1%

If you purchase a motor vehicle (car) for ₹10 lakh or more (in cash), the seller is required to collect 1% TCS from the buyer.

(2) Sale of Jewellery:
Threshold Limit: ₹2 lakh

TCS Rate: 1%

For the sale of jewellery exceeding ₹2 lakh, the seller must collect 1% TCS.

(3) Sale of Other Specified Goods (Not Listed):
Threshold Limit: ₹2 lakh

TCS Rate: 1%

For other goods sold for ₹2 lakh or more, TCS at 1% applies.

Note: The buyer must pay via cash to trigger the TCS.

Important Points to Note:
TCS Applicability: This provision is applicable only when the goods are sold for more than the specified limit in cash. If the transaction is through cheque, draft, or other modes, TCS is not applicable.

Non-applicability to certain goods: TCS does not apply to all goods but is restricted to items like jewellery, motor vehicles, etc., which are mentioned in the list under Section 206C.

Examples:
Motor Vehicle:

If you buy a car for ₹12 lakh (in cash), the seller must collect 1% TCS, i.e., ₹12,000.

Jewellery:

If you buy jewellery worth ₹3 lakh, TCS of 1% will be applicable, i.e., ₹3,000.

Other Goods (where applicable):

For the sale of other goods exceeding ₹2 lakh in cash, the seller must collect 1% TCS.

TCS Filing:
The seller must deposit the collected TCS amount with the government and also issue a TCS certificate (Form 27D) to the buyer.

Conclusion:
The amended Section 206C includes provisions for collecting TCS on sale of motor vehicles, jewellery, and other specified goods if sold for more than ₹2 lakh, with a TCS rate of 1%. Sellers must collect TCS from the buyer in cash transactions and comply with the filing and documentation requirements.

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