04 November 2020
Tax Collection At Source (TCS) Under Newly Introduced Section 206C(1H) of The Income Tax Act, 1961 Wef 01/10/2020
1. BASIC FEATURES:
a) Section is applicable only in case of seller whose total sales, gross receipt or turnover from the business carried on by him exceeds Rs. 10 crores during the financial year immediately preceding financial year in which sale is carried out. In other words to be liable to collect TCS in Current financial year (FY 2020-21) total turnover of the seller should be more than Rs.10 crores in F.Y.2019-20.
b) TCS is required to be collected from the buyer whose aggregate purchases exceed Rs.50 lacs in any previous year.
c) TCS is required to be collected only on sale consideration exceeding Rs. 50 lacs. In other words, TCS on first Rs.50 lacs is not required to be collected.
d) Rate of TCS provided in the section is 0.1% of sale consideration. Vide Press Release dated 13.05.2020 rate of tax has been reduced for the current financial year to 0.075%
One of the my client is a public limited company. We are supplying Forklifts spares and service. Our company is Sole proprietor company not having permanent staff instead migrant. No once covered unders ESI & PF as we have less than 10 staff altogether including migrant mechanic.
The company deducted ESI ,PF and TDS without any notice.
TDS deducted including Spares supply portions.
Please advise legal validity points to have a discussion as well how to get refund. We took Star Health Medical policy for migrants and eligibility mechanics covering their Road Accident,industrail accidents.
CAclubindia
