TCS on sale of jewellery
Summary : TCS @ 1% required to be deducted on sale of Jewellery exceeding Rs 5,00,000/- in cash. However as per Finance Bill 2017 w.e.f 01.04.2017 this Provision of deduction of TCS on sale of jewellery is to be abolished.
Reasons for no TCS on sale of Jewellery from 01.04.2017: As there will be restriction of transaction in cash more than Rs 3,00,000/-, there cannot be any transaction mentioned in section 206C. Hence it has been omitted.
Explanation on Clause 71 of Finance Bill – Removal of TCS on Sale of Jewellery w.e.f 01.04.2017
Clause 71 of the Finance Bill 2017 seeks to amend section 206C of the Income-tax Act relating to profits and gains from he business of trading in alcoholic liquor, forest produce, scrap, etc.
Clause (ii) of sub-section (1D) of the said section provides for tax collection at source at the rate of one per cent. of sale consideration on cash sale of jewellery exceeding five lakh rupees. Finance Bill 2017 proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided under section 269ST. [ Read No Person can receive cash of Rs 3 Lakh or more w.e.f 01.04.2017 ]
The proposed amendment is consequential to the insertion of a new section 269ST in the Income-tax
This amendment will take effect from 1st April, 2017.
Relevant Clause 71 of Finance Bill 2017- Amendment of section 206C.
In section 206C of the Income-tax Act,—
(a) in sub-section (1D),—
(A) for the words and brackets “or jewellery or any other goods (other than bullion or jewellery)”, the words and brackets “or any other goods (other than bullion)” shall be substituted;
(B) clause (ii) shall be omitted;
(b) in sub-section (1E), the words “or jewellery” shall be omitted;
(c) in the Explanation occurring after sub-section (11),—
(A) in clause (aa),—
(I) in sub-clause (ii), the words, brackets, figure and letter “or sub-section (1F)” shall be omitted;
(II) after sub-clause (ii), the following sub-clause shall be inserted, namely:—
“(iii) sub-section (1F) means a person who obtains in any sale, goods of the nature specified in the said sub-section, but does not include,—
(A) the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or (B) a local authority as defined in Explanation to clause (20) of section 10; or
(C) a public sector company which is engaged in the business of carrying passengers.”;
(B) clause (ab) shall be omitted.