INTRODUCTION: The provisions regarding the TCS on sale of jewellery were brought on the statute by the Finance Act, 2012 with effect from 1 st July, 2012. These provisions are contained in Section 206 (1D) of the Income Tax Act. Some related provisions / explanations are contained in sub section (1E) and Explanation (ab) also. According to these provisions, if seller of the jewellery receives sale consideration in cash and such amount received in cash is in excess of Rs.5 lakhs then the seller is required to collect TCS from the buyer @ 1% of such sale consideration received in cash. Apart from the provisions regarding TCS on jewellery, the above sub section (1D) also prescribes for TCS on receipt of sale consideration in cash in respect of bullion and other goods (i.e., all goods other than bullion and jewellery). But in respect of those other goods the threshold limit for TCS is Rs. 2 lakhs only as against the threshold limit in respect of sale of jewellery at Rs. 5 lakhs.
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