TCS on Cash Sale of Goods or Services w.e.f 01.04.2017

Finance Act 2017  had Deleted the Clause 206C(1D) and (IE) from Income Tax Act w.e.f 01.04.2017 . Thus person is not required to collect TCS on Cash Sale of Goods or services or bullion ( exceeding Rs 2 Lakh)  or jewellery (exceeding Rs 5 Lakh ) w.e.f 01.04.2017. This has been done because of insertion of new Section 269ST in income tax act w.e.f 01.04.2017 as now no person cash receive in Cash Rs 2 Lakh or more. Read 269ST- Cash Receipt Rs 2 Lakh or more Banned w.e.f 01.04.2017

Relevant Extract of Deleted/Omitted Clauses 206C(1D) and 206C(IE) of Income Tax Act before 01.04.2017

[(1D) Every person, being a seller, who receives any amount in cash as consideration for sale of bullion ¹⁸[***] or jewellery ^18a[or any other goods (other than bullion or jewellery) or providing any service], 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;] ^18b[or]

^18c[(iii)     for any goods, other than those referred to in clauses (i) and (ii), or any service, exceeds two hundred thousand rupees:

Provided that no tax shall be collected at source under this sub-section on any amount on which tax has been deducted by the payer under Chapter XVII-B.]

^18c [ (1E) Nothing contained in sub-section (1D) in relation to sale of any goods (other than bullion or jewellery) or providing any service shall apply to such class of buyers who fulfil such conditions, as may be prescribed.

18. Words “(excluding any coin or any other article weighing ten grams or less)” omitted by the Finance Act, 2013, w.e.f. 1-6-2013.Amendment of section 206C.

18a. Inserted by the Finance Act, 2016, w.e.f. 1-6-2016.

18b. Inserted for “rupees.” by the Finance Act, 2016, w.e.f. 1-6-2016.

18c. Inserted by the Finance Act, 2016, w.e.f. 1-6-2016.

Amendment of section 206C by Finance Act 2017

( Extract from Clause 72 of Finance Act 2017 Notified on 31.03.2017)

72. In section 206C of the Income-tax Act,—

(a) sub-section (1D) shall be omitted;

(b) sub-section (1E) shall be omitted;

(c) in sub-sections (2), (3), (3A) and sub-section (9), the words, brackets, figure and letter “or sub-section (ID)” wherever they occur, shall be omitted;

(d) in sub-section (6A), in the first proviso, the words, brackets, figure and letter “, other than a person referred to in sub-section (1D),” shall be omitted;

(e) in sub-section (7), in the proviso, the words, brackets, figure and letter “, other than a person referred to in sub-section (ID),” shall be omitted;

(f) in the Explanation occurring after sub-section (11),—

(A) in clause (aa),—

(I) sub-clasuse (ii) 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.

(C) in clause (c), for the words, brackets, figures and letters “or sub section (1D) are sold or services referred to in sub-section (ID) are provided”, the words “are sold” shall be substituted.