Tcs on scrap sales
Querist : Anonymous
We are into Construction industry and sold scrap worth of Rs 51000.
Is TCS is applicable on the above transaction.
Regards
Querist : Anonymous
appreciated if u could provide any supporting material.
---
### Applicability of TCS on Scrap Sales under Section 206C:
* **Section 206C(1)** of the Income Tax Act mandates TCS (Tax Collected at Source) at **1% on the sale of scrap**.
* The term **“scrap”** is generally understood as waste material left after manufacturing or other processes, which is sold for recycling or reuse.
* Even **manufacturing waste or scrap** is subject to TCS @ 1% if it is sold to another party.
* The value of scrap sold should be considered for TCS regardless of whether it arises from manufacturing or construction activities.
---
### For your case (Construction Industry):
* Scrap arising out of construction activities, sold for Rs 51,000, **falls under the category of scrap** and hence attracts TCS @1% as per the Income Tax rules.
* The threshold limit of Rs 50,000 is crossed, so TCS collection is mandatory.
* The relevant provision is **Section 206C(1)(ix)** which includes sale of scrap, waste and other specified goods.
---
### Supporting material reference:
* CBDT Circulars and Income Tax Act Section 206C.
* TCS is applicable on scrap, irrespective of whether it comes from manufacturing or construction waste.
* The **Finance Act 2013** expanded the scope of TCS to include scrap.
---
### Summary:
* **Yes, TCS @ 1% is applicable on scrap sales of Rs 51,000, including construction scrap.**
* Buyer has to pay the TCS amount to the seller, who in turn must deposit it with the government.
---
If you want, I can help you draft a note or check any specific exemption or thresholds related to your state or sector. Would you like that?
Click here to login now
Similar Resolved Queries
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- MSME disclosure and disallowance
- EPF ECR NEW RULES Sep 17th 2026
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Issuing of delivery challan by seller of goods
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
