Amendment in tax collection at source TCS rules

In finance tax there are some changes made in tax collection at source TCS rules. These rules will be applicable from 01-07-2012. Tax collection at source is the type of income tax which is collected by the seller of goods from the buyer. However this tax is applicable to some products like scrap,tendu leaves,iron ore, minerals etc. The changes in the rules of TCS are  as follows.


In section 206C of the Income-tax Act, with effect from the 1st day of July, 2012,—
(a) in sub-section (1), in the Table, after serial number (vi) and the entries relating thereto, the following serial number and entries shall be inserted, namely:—
Sl. No.                               Nature of goods                                            Percentage
 
"(vii)                              Minerals, being coal or lignite or iron ore             one per cent.";
(b) in sub-section (1A), after the words "articles or things", the words "or for the purposes of generation of power" shall be inserted;

(c) after sub-section (1C), the following sub-section shall be inserted, namely:—

"(1D) Every person, being a seller, who receives any amount in cash as consideration for sale of bullion (excluding any coin or any other article weighing ten grams or less) or jewellery, shall, at the time of receipt of such amount in cash, collect from the buyer, a sum equal to one per cent of sale consideration as income-tax, if such consideration,—

(i) for bullion, exceeds two hundred thousand rupees; or
(ii) for jewellery, exceeds five hundred thousand rupees.";

(d) in sub-section (2), after the words, brackets, figure and letter "or sub-section (1C)", the words, brackets, figure and letter "or sub-section (1D)" shall be inserted;

(e) in sub-section (3), after the words, brackets, figure and letter "or sub-section (1C)", the words, brackets, figure and letter "or sub-section (1D)" shall be inserted;

(f) in sub-section (6A),—
(A) before the proviso, the following proviso shall be inserted, namely:—
"Provided that any person, other than a person referred to in sub-section (1D), responsible for collecting tax in accordance with the provisions of this section, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an assessee in default in respect of such tax if such
buyer or licensee or lessee—

(i) has furnished his return of income under section 139;
(ii) has taken into account such amount for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:";
(B) in the proviso, for the words "Provided that", the words "Provided further that" shall be substitute

(g) in sub-section (7), the following proviso shall be inserted, namely:—
"Provided that in case any person, other than a person referred to in sub-section (1D), responsible for collecting tax in accordance with the provisions of this section, fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee but is not deemed to be an assessee in default under the first proviso of sub-section (6A), the interest shall be payable from the date on which such tax was collectible to the date of furnishing of return ofincome by such buyer or licensee or lessee.";

(h) in sub-section (9), after the words, brackets, figure and letter "or sub-section (1C)" at both the places where they occur, the words, brackets, figure and letter "or sub-section (1D)" shall be inserted;
(i) in the Explanation, occurring at the end,—
(i) for clause (a), the following clauses shall be substituted, namely:—
'(a) "accountant" shall have the meaning assigned to it in the Explanation to subsection (2) of section 288;
(aa) "buyer" with respect to—
(i) sub-section (1) means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the Table in sub-section (1) or the right to receive any such goods but does not include,—

(A) a public sector company, the Central Government, a State Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or

(B) a buyer in the retail sale of such goods purchased by him for personal consumption;

(ii) sub-section (1D) means a person who obtains in any sale, goods of the nature specified in the said sub-section;

(ab) "jewellery" shall have the meaning assigned to it in the Explanation to subclause
(ii) of clause (14) of section 2.';
(ii) in clause (c), after the words, brackets and figure "in sub-section (1)", the words, brackets, figure and letter "or sub-section (1D)" shall be inserted.
Tags-tcs rules 2012,tax collection at source rules,new tcs rules,new tcs rules 2012,income tax on sale of jewellery, income tax on purchase of jewellery.
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