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Sub section 1H in 206C

Ravindran Kotiath (13 Points)

16 January 2021

pI explain the TCS under subsection 1H in 206C of Finance Act 2020

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2 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 16 January 2021

The new provisions of TCS u/s 206C(1H) have come into force with effect from 1 October 2020 and according to it if your turnover is more than 10 crores in the previous financial year i.e. the year ended 31 March 2020, then this year you will have to collect and deposit TCS on your receipts from sale of goods from such buyers from whom you received more than Rs. 50 Lakhs as sale consideration during the current Financial year. The TCS is payable on the amount of receipt which is greater than 50 Lakhs and received after 1st. Oct. 2020. The rate of TCS is 0.1% and Presently due to corona Pandemic 25% discount has been given in this tax rate till 31 March 2021 and its effective rate is 0.075%.

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Krishna Chaudhary (Accountant) (4531 Points)
Replied 16 January 2021

Analysis of New TCS Section 206C(1H) effective from 01.10.2020

New TCS Section 206C(1H) is made effective from 01.10.2020 vide Finance Act, 2020 and it mandates that

-A Seller of Goods is liable to collect TCS on Sale of Any Goods from Buyer

-TCS to be collected if the Value/Aggregate Value of Goods is more than 50 Lakhs

-TCS to be collected on [ Total Sale Value – Rs. 50 Lakhs]

-Rate of TCS is 1%, if PAN of buyer is available [ 1% if PAN

not Available]