Last updated on July 4th, 2022 at 12:31 pm
The tax collected at the source is an additional amount of tax collected by the seller for the below-mentioned specified goods from the buyer. The amount of TCS that is deposited to the Government is collected over and above the sale price. The tax is collected at a specified rate applicable to the specified goods.
Only the following will be considered as sellers as per TCS mechanism u/s 206C
> Central Government
> State Government
> Local Authority
> Statutory Corporation/Authority
> Company registered under the Companies Act
> Partnership Firms
> Co-operative Society
> Individual/HUF subject to tax audit u/s 44AB
Note: TCS shall not be collected at source, if the buyer is Central Government, State Government, Embassy, High Commission, Public Sector Company, Social Clubs, Sports Clubs, Local Authority.
> When the eligible goods are used for personal consumption
> When the buyer purchases the goods not for the purpose of trading but for the purpose of manufacturing, processing, or production.
TAN (Tax collection Account Number)
- The seller (Collector of tax) has to obtain a tax collection account number (TAN).
- TAN is to be quoted on all challans, returns, and TCS certificates issued by the seller.
List of goods covered by provisions of TCS
[su_table]
|
Section |
Nature of Goods |
TCS Rate |
|
206C (1) |
Sale of Alcoholic liquor for human consumption |
1% |
|
206C (1) |
Sale of Tendu Leaves |
5% |
|
206C (1) |
Timber obtained under a forest lease or any other mode than a forest lease |
2.5% |
|
206C (1) |
Sale of any forest produce other than Tendu Leaves and timber |
2.5% |
|
206C (1) |
Sale of Scrap |
1% |
|
206C (1) |
Minerals like Lignite, Coal, and Iron Ore |
1% |
|
206C (1F) |
Purchase of motor vehicle exceeding Rs 10 lakhs |
1% |
|
206C (1C) |
Parking lot, Toll Plaza, mining and quarrying |
2% |
|
206C (1G) |
Sales of Overseas Tour Program Package more than Rs 7 Lakh |
5% |
|
206C (1G) |
Remittance under (Liberalised Remittance Scheme) LRS for education loan taken from the financial institution |
0.5% |
|
206C (1H) |
Sale of goods exceeding Rs 50 Lakhs other than exported goods by seller whose total sales, gross receipts, or turnover is more than Rs 10 crores |
0.1% |
[/su_table]
Note: Higher education cess @ 4% shall be calculated on TCS amount.
Note: Surcharge will also be calculated if payment from the buyer exceeds Rs 50 lakhs.
Note: If the buyer fails to provide the details of PAN to the seller then TCS will be collected at double the rate or 5% whichever is higher. Note: In the case of TCS u/s 206C (1H) it will be 5% if PAN is not furnished.
Applicable Compliances with due date and penalty for failure
The seller needs to remit the tax collected source in Challan no. 281 to Government Account within one week from the end of the month in which it was collected.
TCS collectors have to file quarterly returns in Form 27EQ to CPC-TDS in electronic mode within 15 days from the end of the quarter. (Note: For the last quarter of the financial year ending in March, TCS return can be filed within 45 days from the end of the quarter)
TCS collectors have to furnish a TCS certificate in Form 27D within 15 days from filing the quarterly return.
If the seller (TCS collector) who is supposed to collect TCS and remit to the Government fails to either collect TCS or remit the same to the Government then such a seller shall be considered an assessee in default and will have to face the consequences.
[su_table]
|
Particulars |
TCS Payment |
TCS Return |
TCS Certificate |
|
Month/Form |
Challan no. 281 |
Form 27EQ |
Form 27D |
|
April |
7th May |
15th July |
31st July |
|
May |
7th June |
||
|
June |
7th July |
||
|
July |
7th August |
15th October |
31st October |
|
August |
7th September |
||
|
September |
7th October |
||
|
October |
7th November |
15th January |
31st January |
|
November |
7th December |
||
|
December |
7th January |
||
|
January |
7th February |
15th May |
31st May |
|
February |
7th March |
||
|
March |
7th April |
||
|
In case of failure to pay tax/file return/ issue certificate |
Interest @ 1% p.m. on TCS amount |
Penalty of Rs 200 per day |
Penalty of Rs 100 per day |
|
Sec 271CA – Penalty equivalent to TCS amount |
|||
|
Sec 276BB -Imprisonment up to 7 years |
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