TCS on Cash Buy of Bullion & Jewellery

4
1877

The government in order to fight the black money , has tried to plugged the black money conversion loopholes in law .One of the very old method is investment in bullion and jewellary in cash . Finance Bill 2012 has inserted provision effective from 01/07/2012 which require  that to be collected at source by the seller at the specified rate on certain goods like alcoholic liquor, tendu leaves, scrap etc. at the time of sale the seller of bullion and jewellery shall collect  tax at the rate of 1% of sale consideration from every buyer of bullion and jewellery if sale consideration exceeds two Budget-Bullionlakh rupees  and the sale is in cash. This would be irrespective of the fact whether buyer is a manufacturer, trader or purchase is for personal

use.

This has been brought by the government as a measure to  reduce the quantum of cash transaction in bullion and jewellery sector and for curbing the flow of unaccounted  money in the trading system of bullion and jewellery.Thus , in section 206C of the Income-tax Act, with effect from the 1st day of July, 2012, sub-section 1D has been inserted to provide following tax collection at source provisions

“(1D) Every person, being a seller, who receives any amount in cash as consideration for sale

of bullion or jewellery, shall, at the time of receipt of such amount in cash, collect from the buyer,a sum equal to one per cent. of sale consideration as income-tax, if the sale consideration exceeds two hundred thousand rupees.”;

What it means is that every purchase worth Rs 2 Lakh information will now either reach to income tax department or some tax at source will be with government

4 COMMENTS