{"id":1979,"date":"2016-06-28T03:28:30","date_gmt":"2016-06-28T03:28:30","guid":{"rendered":"https:\/\/sunkrish.com\/?p=1979"},"modified":"2017-01-15T12:01:37","modified_gmt":"2017-01-15T12:01:37","slug":"cbdt-clears-the-air-on-tax-collection-at-source","status":"publish","type":"post","link":"https:\/\/sunkrish.com\/index.php\/2016\/06\/28\/cbdt-clears-the-air-on-tax-collection-at-source\/","title":{"rendered":"CBDT clears the air on tax collection at source"},"content":{"rendered":"
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The Central Board of Direct Taxes (CBDT) has made it clear that the 1 per cent tax collection at source (TCS) \u2014 introduced in this year\u2019s Budget \u2014 will apply only to the cash component and not the entire sale consideration. This has been conveyed in a clarificatory circular issued by the CBDT on Friday.<\/p>\n

To curb the cash economy, Budget 2016 had introduced a provision in income tax law requiring the seller to collect 1 per cent tax at source from the purchaser on the sale in cash of certain goods or provision of services in excess of \u20b92 lakh.<\/p>\n

Q&A format<\/b><\/p>\n<\/div>\n

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The circular \u2014 in the form of question and answer \u2014 has been issued to clarify the applicability of the provision where the sale consideration received is partly in cash and partly in cheque<\/p>\n

TCS will be applicable only on the cash component of the sales amount, and not on the whole of sales consideration, the CBDT circular said.<\/p>\n

For instance, if goods worth \u20b95 lakh are purchased for \u20b92 lakh in cheque and \u20b93 lakh in cash, 1 per cent tax will be levied only on \u20b93 lakh.<\/p>\n

Also, in cash-and-cheque transactions where the cash component is less than \u20b92 lakh, there won\u2019t be any TCS, the CBDT clarified. Further, TCS will not be levied if the cash receipt does not exceed \u20b92 lakh, even if the sale consideration exceeds \u20b92 lakh, said the circular.<\/p>\n

Amit Maheshwari, Partner at CA firm Ashok Maheshwary & Associates, said the CBDT has rightly restricted the 1 per cent TCS to the cash component. This is in line with the Centre\u2019s objective to curb the cash economy and target the expenditure side of black money, he noted.<\/p>\n

Rahul Jain, Partner, Nangia & Co, said the Centre\u2019s constant efforts to clarify the law and avoid possible disputes are heartening. In the absence of clarification, various local trade associations, head offices of stores selling high value items, etc had taken a conservative position.<\/p>\n

\u201cWhile it is excellent to see the Centre pulling all stops to nip disputes in the bud, one wishes the law was drafted better to avoid confusion in the first place,\u201d he added.<\/p>\n

Source: http:\/\/www.thehindubusinessline.com\/economy\/policy\/cbdt-clears-the-air-on-tax-collection-at-source\/article8775966.ece<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Central Board of Direct Taxes (CBDT) has made it clear that the 1 per cent tax collection at source (TCS) \u2014 introduced in this year\u2019s Budget \u2014 will apply only to the cash component and not the entire sale … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":3398,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[492,4,491],"tags":[518,450,311,438,295],"class_list":["post-1979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-standards-audit-due-diligence","category-financial-corporate-services","category-income-tax-e-filing-of-returns-for-individuals-partnerships-companies","tag-black-money","tag-central-board-of-direct-taxes-cbdt","tag-corporate","tag-tax-deducted-at-source-tds","tag-taxation"],"_links":{"self":[{"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/posts\/1979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/comments?post=1979"}],"version-history":[{"count":4,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/posts\/1979\/revisions"}],"predecessor-version":[{"id":3400,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/posts\/1979\/revisions\/3400"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/media\/3398"}],"wp:attachment":[{"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/media?parent=1979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/categories?post=1979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sunkrish.com\/index.php\/wp-json\/wp\/v2\/tags?post=1979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}