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TCS COLLECTION ON SALE OF HEAVY VEHICLE

Loganathan.M (Accountant) (40 Points)

08 April 2021

Dear Experts,

Kindly advise us.

1. One of my customer booked vehicle(Heavy Vehicle) for Rs.16'lacs in the month of March-2021. He paid part amount of the Total value of the Vehicle (Rs.10'lacs thru online+Rs.1.80 lacs by cash)

2. Again he paid the balance amount of Rs.4.20'lacs (Rs.3.20'lacs thru online + Rs.1'lac by cash) in April-2021.

Is TCS to be collected from the customer for the Cash transactions? Applicable or not?

Is there any penalty as we have collected cash more than 2'lacs from a single customer but different accounting periods. (2020-2021 - Rs.1.80'lacs , 2021-2022 - Rs.1'lac)

Please Kindly advise..

Kindly advise.

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1 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 08 April 2021

1) Query is bit confusing because all are customers here. 2) Assuming that the vehicle is purchased for business purpose, no depreciation benefit can be claimed, as cash has been paid exceeding ₹10,000. 3) Tax to be collected from the buyer of the vehicle on the total invoice value of the seller. 4) Seller of the vehicle is liable to pay penalty u/s 271DA for receiving cash of more than 2 lacs (penalty = amount of cash received). It is immaterial whether cash is received during different FYs, as long as it pertains to a single transaction, in this case, purchase of a vehicle, penalty will be attracted.