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Amendment in Section 206C vide Finance Act 2016 - Clarifications

Income Tax - 22/2016 - Dated:- 8-6-2016 - Circular No. 22/2016 F. No 370142/17/2016-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (TPL Division) Dated 8th June 2016 Sub: regarding Section 206C of the Income-tax Act, 1961 (hereafter referred to as 'Act'), prior to amendment by Finance Act, 2016, provided that the seller shall collect tax at source at specified rate from the buyer at the time of sale of specified items such as alcoholic liq .....

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any goods (other than bullion and jewellery) or providing of any services (other than payment on which tax is deducted at source under Chapter XVII-B) exceeding two lakh rupees. So far as sale of Jewellery and bullion is concerned, the provisions of sub-section (1D) of section 206C prior to its amendment by the Finance Act 2016 shall continue to apply. Further, with a view to bring high value transactions within the tax net, it has been provided in sub- section (1 F) of section 206C of the Act .....

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any Central, State or Provincial Act, (iii) Any company, firm or cooperative society, (iv) An individual or Hindu undivided family who is liable to audit as per provisions of section 44AB during the financial year immediately preceding the financial year in which the goods are sold or the services are provided. The amendments brought in section 206C by Finance Act. 2016 are applicable form 1st June 2016. In this regard a number of queries have been received about the scope of the provisions and .....

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ll collect the tax at the rate of one per cent from the purchaser on sale of motor vehicle of the value exceeding ten lakh rupees. This is brought to cover all transactions of retail sales and accordingly it will not apply on sale of motor vehicles by manufacturers to dealers/distributors. Question 2: Whether TCS at the rate of 1% is on sale of Motor Vehicle is applicable only to Luxury Cars? Answer: No. As per sub section (1 F) of Section 206C of the Act the seller shall collect the tax at the .....

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mission and trade representation of a foreign State and shall not be liable to levy of TCS at the rate of I% under sub-section (1 D) and (1 F) of section 206 C of the Act. Question 4: Whether TCS is applicable on each sale of motor vehicle or on aggregate value of sale during the year? Answer: Tax is to be collected at source at the rate of 1% on sale consideration of a motor vehicle exceeding ten lakh rupees. It is applicable to each sale and not to aggregate value of sale made during the year. .....

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position with regard to collection of tax at source under sub-section (1 D) of section 206C. Question 5: whether TCS at the rate of 1% on sale of motor vehicle is applicable in case of an individual? Answer: The definition of "Seller" as given in clause (c) of the Explanation below sub-section (11) of section 206C shall be applicable in the case of sale of motor vehicles also Accordingly, an individual who is liable to audit as per the provisions of section 44AB of the Act during the .....

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