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Section 206C(1H) mandates sellers to collect tax at source (TCS) on goods sales exceeding Rs. 50 lakh annually, provided the seller's turnover exceeds Rs. 10 crore. This provision replaced the older Section 206CR. Section 194Q, on the other hand, requires buyers to deduct tax at source (TDS) on purchases of goods exceeding Rs. 50 lakh in a financial year. Both sections aim to widen the tax net on transactions involving goods.

Mohamed Umar MA

Mohamed Umar MA (Querist)

14 February 2023 What is Section 206 CR?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 February 2023 As per this provision, a seller is required to deduct tax at the source on the sale of goods if the aggregate value of such sale exceeds Rs. 50 lakh during the relevant financial year.

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Mohamed Umar MA

Mohamed Umar MA (Querist)

15 February 2023 Thank You Sir
briefly explain
What is the different Between 206 C1H and 206 CR?
What is 194 Q?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 February 2023 Section 206CR replaced by 206C(1H).
The government has introduced a new section 206C(1H) through Finance Act 2020 to extend the TCS provisions to the seller of goods. As per this provision, a seller whose turnover is above Rs 10 crore is required to collect tax, when he receives more than Rs 50 lakh from one buyer during a financial year.

Under Section 194Q, TDS is applicable on the purchase of goods, if the amount exceeds Rs. 50 lakhs. Under Section 206C (1H), TCS is applicable on the sale of goods, if the amount exceeds Rs. 50 lakhs.

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