Applicability of tcs on cash sales

Tax queries 565 views 2 replies

A Raghavendra

Senior Executive - Finance & Corporate A

67 Points Joined April 2008

Dear Members,

I need some clarrifications about the applicability of TCS on Cash Sales with an instances of CAR Sales and I will be greatfull to all those who will clarrify and guide me in this regard.

Further to above I have the following one Question in connection to the above:

I will sale a Car for Rs.8.00,000/-. for which party gives me A cheque for Rs.6,50,000/- and balance of Rs.1,50,000/- that completes the transaction of Rs.8,00,000/- as a sale consideration. In this case what is my liability towards TCS? Do I need to collect TCS on Rs.1,50,000/- received in cash?

And also please update and expedite me about the correct practice in this regard (i.e, Collection of TCS on Cash Sales).

Once again Iam thanking you one and all and great full to such members in advance, who will facilitate me in this regard.

RAGHAV

Replies (2)

CA Mohit Khattar

Practicing Chartered Accountant

50 Points Joined June 2016

TCS will not be collected in your case since cash consideration is not exceeding 200,000/- . For your Reference also quoting section 206C(1D) applicable w.e.f 01-06-2016

New Sub Section (1D) of Section 206C is as follow:

Every person, being a seller, who receives any amount in cash as consideration for sale of bullion or jewellery or any other goods (other than bullion or jewellery) or providing any service shall, at the time of receipt of such amount in cash, collect from the buyer, a sum equal to 1% of sale consideration as income-tax, if such consideration, —

(i) for bullion, exceeds Rs 2,00,000 or

(ii) for jewellery, exceeds Rs 5,00,000 or

(iii) for any goods, other than those referred to in clauses (i) and (ii), or any service, exceeds Rs 2,00,000

Provided that if any transaction covered under TDS than TCS will not be applicable on it.

206C (1E) – Nothing contained in sub-section (1D) in relation to sale of any goods (other than bullion or jewellery) or providing any service shall apply to such class of buyers who fulfil such conditions, as may be prescribed. {Not yet prescribed}.

Hence , TCS will only be collected if such consideration (cash ) exceeds 200,000/-

CA Saurabh Singh

Practising Chartered

974 Points Joined June 2015

Sir,

There is still a chaos in TCS collection for cash sale exceedingh 2,00,000 in regards to Motor vehicle as seperate taxation rule has been framed for the aforesaid in case sale exceeds 10, 00,000.

An inpterpreattion could be drawn that car is also a good and even though its value is less than 10Lakhs but cash payment exceeds 2lakhs TCS needs to bededucted @ 1%.

But in your case the situation is much more clear as the sale value of the car is less tha 10lakhs i.e. 8lakhs and also the cash transaction is less than 2lakhs i.e. 1.5laks, hence there is no requirement to deduct TCS on the same.

Thanks