Tax Collection At Source To Reduce Cash Transactions: Juneja, Kaushal

Ludhiana, June 9, 2016: In order to reduce the cash transactions against sale of goods & services, to streamline the tax system for fast collection of tax and to bring high value transactions into tax net, Tax Collection at Source (TCS) has been enlarged w.e.f June 1, 2016.
Today while deliberating on TCS in a meeting of tax experts Ashok Kumar Juneja, President and B.R. Kaushal, Secretary General Punjab Tax Practitioners Association (PTPA) said that the seller of any goods & services (other than bullion & jewellery) whose accounts were auditable under section 44AB of Income Tax Act in the immediately preceding financial year shall collect tax @ 1% from the purchaser on sale or providing any services (other than payment on which tax is deducted at source) exceeding Rs. 2 Lac in a single transaction if full/any part of the payment is received in cash. The TCS provisions will be applicable at the time of receipt of cash. As far as sale of Jewellery and bullion is concerned, the provisions of sub section C(1) of section 206C prior to it`s amendment by Finance Act 2016 shall continue to apply.
Juneja & Kaushal further elaborated that to bring high value transaction within the tax net TCS has also been made applicable on the sale of Motor Vehicles where the sale consideration for motor vehicle exceeds Rs. 10 Lacs shall collect TCS @ 1% shall be collected. TCS provisions are applicable on any mode of payment. It can be either by cash or by cheque/RTGS. Juneja & Kaushal said that the penalty for contravention of TCS provisions will be imposed under section 271CA equal to amount of tax which person failed to collect.