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Tax collection at source

Tax collection at source

Tax Collection at source (Popularly Known as TCS) was introduced with the main aim of collecting Tax at the point where expenditure is been done by assessee to obtain any tender or right for generating more income. By means of TCS, government was able to increase its revenue.

In case of Tender allotment when any seller allot any tender to buyer then seller need to deduct the Tax collection at source on the amount of tender allotted.
Now Question arises:
What are the goods covered under Tax collection at source?
Ans. The table below detailed about the products and the rate at which Seller is required to deduct TCS:-
1. Alcoholic Liquor for Human consumption : 1%
2. Tendu Leaves : 5%
3. Timber obtained under a forest lease : 2.5%
4. Timber obtained by any means other than forest Lease : 2.5%
5. Any other forest produce : 2.5%
6. Scrap : 1%
7. Minerals, being coal or lignite or iron ore : 1%
8. Parking Lot : 2%
9. Toll Plaza :2%
10. Mining and quarrying : 2%
11. Gold Bullion (If, Cash Purchase > Rs.2,50,000) : 1%
12. Gold Jewellery (If, Cash Purchase > Rs. 5,00,000) : 1%

Who is seller?
Ans. Seller means Central Government, a State Government or any local authority or company or firm or co-operative society or Individual/HUF who are covered u/s 44AB in preceeding Financial year.

Who is Buyer?
Ans. Buyer means any person other than:-
1) a public sector company, the Central Government, a State Government, and an embassy, Trade representation, of a foreign State and a club; or
2) a person who purchases goods for human consumption

NOTE:- In case if Goods are Gold jewellery or gold bullion, then buyer will be all person an no exemption.

1. In case if buyer of goods mentioned in point 1 to 7, furnishes to seller that the product purchased by him would be used for manufacturing and not for trading purpose in FORM 27C then no requirement of collecting TCS from buyer.
2. Here , “scrap” means only that waste material which arise from manufacturing purpose

For more information and details about TCS click this link and do see the classes it is the best of all

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