Know Applicable New IT Provisions of TCS from 1st October 2020
- knp gst
- Sep 5, 2020
- 3 min read
Here we will go through all the latest tax collected at source (TCS) provisions as listed by the tax department. The department has made clear all the points in detail. The Finance Act 2020 has launched three new provisions under
Tax collected at source
. All new TCS provisions have been applicable from October 1, 2020.
TCS on Foreign Remittance Through LRS
The individual liable to manage
Any approved merchant (“AD”) as specified under FEMA
When the tax should be collected
AD obtains an amount or a total of the value of INR 700,000 or higher in a fiscal year
From whom the tax should be raised
From a customer of the overseas currency sent out of India below the LRS
Price of Collection
Rate of the collection is 5%
In no PAN or Aadhaar case rate shall be 10%
Non Applicability in the following Cases
If the customer is liable to subtract TDS
If a client is a Government, ministry or high commission
TCS on Wholesaling Overseas Tour Packages
An individual liable to accumulate
Trader of abroad travel packages and involves costs for travel, hotel visit or boarding or similar interests.
When the tax should be raised
No financial deadline defined, the tax should be obtained irrespective of the cost
From whom this tax should be solicited
From any person who buys such package
Charge of Collection
Rate of the collection is 5%
In no PAN or Aadhaar case rate will be 10%
TCS on the Selling of Any Goods(1/3)
The person responsible to collect
A dealer whose turnover surpasses INR 10 Crores in the directly preceding financial year
When the tax should be collected
At sales time the product other than tendu leaves, timber, scrape, toll ticket, cars or goods responsible to TDS
From whom the tax should be collected
Value or aggregate amount of compensation received surpasses INR 50 lacs through.
Rate of Collection
Percentage of the collection is 0.1%
In no PAN or Aadhaar case rate will be 1%
Non Applicability in the below Cases
If the consumer is likely to subtract TDS
If a buyer is Government, ministry or high
TCS on the Selling of Any Goods (2/2)
TCS on the Selling of Any Goods (3/3)
One has tried to address the practical aspects to initiate the provisions through the FAQ:
Q.1 – How to collect tax from the buyer?
The invoice includes the amount of TCS that the seller needs to raise. But until the amount gets collected there is no concession arises on the collection of the amount.
Q.2 – How to conclude the applicability of these prerequisites?
The law cannot make important to the Act continuously when the seller is required to follow that means the applicability has to be laid on a year to year foundation.
Q.3 – Is TCS applied to the sale of the property?
Trade of property is narrated distinctively beneath the procurement of section 194IA for a value exceeding INR 50 Lakhs.
Q.4 – Whether TCS should be refunded in case of sales returns?
No, simply initial sales amount has to be returned as the amount of TCS would have been credited as prepaid taxes and will appear in form 26AS of the customer. Though the amount should not be settled or net settlement has to be done after settlement of return then on before-mentioned net remuneration TCS will be collected.
Q.5 – Whether the consideration will include the amount collected towards GST?
The term plan has not defined. Under the section 145A irrespective of the practice in books of accounts, the number of sales will be including GST.
TCS Payment and Return
The TCS collection required to be paid for the next month in 7 days
The quarterly TCS return has to be submitted i.e Form 27EQ
Get to know all about the return forms under TDS i.e. 24Q, 26Q, 27Q, 27EQ along with the due dates. Also, we mentioned the penalty norms and steps to download TDS forms. Read more with concern for the tax collected by him
The due date of tax in a quarter is divided
Way Forward & Scope Forward
Way forward
We shall assist in determining the applicability of the above provision, depending on the nature of business and each business transaction. The value on which the tax has to be obtained and the amount of payment for all the transactions.
Scope Forward
An illustration of the global pandemic COVID – 19, We should not reflect the present improved rates as the government recommended. Although for the purpose of finishing the rates has been diminished in comparison to sales of goods the reduction is about 0.075% for a buyer who has PAN/Aadhaar for the present financial year.
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