Amendment of section 206C.
90. In section 206C of the Income-tax Act, in sub-section (1G), with effect from the 1st day of July, 2023,––
(i) in the long line, for the word, “five”, the word “twenty” shall be substituted;
(ii) in the first proviso, for the words, “and is for a purpose other than purchase of overseas tour program package”, the words “and is for the purposes of education or medical treatment” shall be substituted;
(iii) in the second proviso, for the words “is for a purpose other than purchase of overseas tour program package”, the words “is for the purposes of education or medical treatment” shall be substituted.
Notes on Clauses:
Clause 90 of the Bill seeks to amend section 206C of the Income-tax Act relating to tax collected at source from profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc.
Sub-section (1G) of the said section, inter-alia, provides that every person being an authorised dealer, who receives any amount, or an aggregate of amounts, of seven lakh rupees or more in a financial year for remittance out of India under the Liberalised Remittance Scheme of the Reserve Bank of India from a buyer, being a person remitting such amount out of India; or being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package, shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer by any mode, whichever is earlier, collect from the buyer, a sum equal to five per cent. of such amount as income-tax.
It is proposed to amend the said sub-section (1G) so as to increase the rate of collection of tax at source from “five per cent.” to “twenty per cent. if it is for a purpose other than for education or medical treatment”.
It is further proposed to amend the first proviso to the said section to provide that collection of tax at source is not applicable where amount or aggregate of amount is less than seven lakh rupees is remitted for the purpose of education or medical treatment.
It is also proposed to amend the second proviso to provide that collection of tax at source is applicable where amount or aggregate of amount in excess of seven lakh rupees is remitted for the purpose of education or medical treatment.
These amendments will take effect from 1st July, 2023.
