TCS Provisions Applicable with effect from 1st October, 2020.
Relevant Definitions for section206C(1H)
Buyer means a person who purchases any goods, but does not include,—
(A) the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or
(B) a local authority as defined in the Explanation to clause (20) of section 10; or
(C) a person importing goods into India or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein;
Seller means a person whose total sales, gross receipts or turnover from the business carried on by him exceed Rs. 10 crore during the financial year immediately preceding the financial year in which the sale of goods is carried out, not being a person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein.
Explanation
As per section 206C(1H) of Income-tax Act, 1961, every person being a seller, who receives any amount as consideration for sale of any goods* of the value or aggregate of such value exceeding Rs. 50 lakh in any previous year shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 % of the sale consideration exceeding Rs. 50 lakh as income-tax.
*Sale of goods excludes:
(a) goods being exported out of India or
(b) goods covered in sub-section (1) or sub-section (1F) or sub-section (1G)#
#Refer the link given below for complete reading of this section.
Further, if the buyer has not provided the Permanent Account Number or the Aadhaar number to the seller, then tax shall be collected at 1 %.
If the buyer is liable to deduct tax at source under any other provision of this Act on the goods purchased by him from the seller and has deducted such amount then this sub-section shall not apply.
#For complete reading of section 206C: https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx
