Tax Collected at Sources also known as TCS is the tax collected by the seller from the buyer at the time of sale of goods. This is governed under section 206C of the Income Tax Act.
The Goods applicable under TCS are as listed below;
- Liquor of alcoholic nature, made for consumption by humans
- Timber wood under a forest leased
- Timber wood by any other mode than forest leased
- A forest produce other than Tendu leaves and timber
- Tendu leaves
- Scrap
- Minerals like lignite, coal and iron ore
- Bullion that exceeds over Rs. 2 lakhs/ Jewellery that exceeds over Rs. 5 lakh.
- Purchase of Motor vehicle exceeding Rs. 10 Lakhs
- Parking lot, Toll Plaza and Mining and Quarrying
To know more on the rate of tax applicable on sale of above goods, read below; https://www.saraltds.com/blogs/tcs-rate-chart/f
When the above-mentioned goods are purchased and utilized for the purpose of manufacturing, processing, or producing things, then the taxes are not payable. If the goods are u purchased and utilized for trading purposes then tax is payable. The tax payable is collected by the seller at the point of sale.
In Finance Bill 2020, recent changes have been brought on TCS applicability which can be read below; https://www.saralaccounts.com/blogs/change-in-tcs-provision-2020/