Vehicle

IT must be TCS and not TDS......

Under section 206C of IT act, the seller has to collect Tax at Source (TCS) at the rate of 1% from purchaser while selling the specified items or services beyond specified limits.

The following transactions are added in section 206C of IT act, for collection of TCS

1. Sale of any goods in cash (other than jewellery or bullion) of more than Rs. 2 lakh.
2. Providing any services whose receipt is in cash exceeding Rs. 2 lakhs (other than those services for which tds is deductible under any section)
3. Sale in cash of bullion exceeding rs. 2 lakh and jewellery exceeding 5 lakh rupees.
4. Sale of motor vehicle exceeding Rs. 10,00,000 in cash or any other mode.

The CBDT has issued two circulars to clarifies some points relating to this section. Points in the clarifications are

• If the sales consideration of more than Rs. 2 lakhs is partly received in cash and partly in cheque and cash receipts in less than rs. 2 lakhs then NO TCS is required to be collected.
   
• Only retail sale is covered, this section doesn’t apply to sale by manufacturers to dealers/distributors.
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• The provisions of TCS on sale of motor vehicle exceeding ten lakh rupees is not dependent on mode of payment.
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• All motor vehicles are covered, whether its a car or any other vehicle

circular/circular232016

circular/circular222016.

Yes, it is treated similar to TDS. While filing annual ITR, assessee can claim the TCS amount as tax credit to his account and adjust the same against his tax liability. Any excess can be claimed as refund. (By this process, department gets information about the high value transaction; but as such no monetary loss to assessee)