If I am a trader in any goods having sales of more than INR 10 Crores in the last financial year and I have A customer from whom I collect dues of more than INR 50 Lakhs in the current financial year (ONE FINANCIAL YEAR), then along with the dues collection, I am also supposed to collect Income Tax from the customer @ 0.1% of the amount in excess of INR 50 Lakhs and pay to the Govt. within the specified timelines.
Effective from 1st April 2020.
The TCS rate of 0.1% becomes 1% if the buyer does not have PAN/Aadhar with him.
For calculating the limit of INR 10 Crores and INR 50 Lakhs, sale value excluding GST to be considered.
Goods which are already covered under other TCS rates and not covered under this rule:
(i) Alcoholic Liquor for human consumption - 1%
(ii) Tendu leaves - 5%
(iii) Timber - 2.5%
(iv) Any other forest produce not being timber or tendu leaves - 2.5%
(v) Scrap - 1%
(vi) Minerals, being coal or lignite or iron ore - 1%
(vii) Sale of a motor vehicle - 1%
(viii) Overseas tour program package - 5%
(ix) Transactions covered under LRS Scheme of RBI - 5%
If any transaction is liable for TDS deduction and the same is deducted and paid to the Govt. then TCS will not apply on the same transaction.
Failed to adhere to the TCS rules - Be ready for paying penalty and interest!