Tax needs to be collected by the seller from the buyer of specific goods. Tax Collected at Source (TCS) Rates are different for each specified category of goods. The TCS so collected by the seller needs to be deposited with the government via challan no. 281. And the seller of the goods needs to file TCS Return in Form 27EQ.
The latest TCS Rates for FY 2016-17 (AY 2017-18) w.e.f. 01/06/2016.
| Nature of Goods | TCS Rates |
|---|---|
| Alcoholic liquor for human consumption | 1% |
| Tendu Leaves | 5% |
| Timber obtained under a Forest Lease | 2.5% |
| Timber obtained by any mode other than Forest Lease | 2.5% |
| Any other Forest produce not being forest timber or tendu leaves | 2% |
| Scrap | 1% |
| Bullion if consideration exceeds Rs. 2 Lakhs or jewellery, if consideration exceeds Rs. 5 Lakhs (and applicable if amount is received in cash {from 1st July 2012} SEC 206C (1D) | 1% |
| Parking Lot, Toll Plaza, Mining and Quarrying | 2% |
| Minerals being Coal or Lignite or Iron ore (applicable from 1st July 2012) | 1% |
| Sale of Cars (New and Old) if sale is above Rs. 10 Lakhs | 1% |
| Sale of Goods in cash exceeding Rs. 2 Lakhs | 1% |
| Providing Any Service (Other than payments on which TDS has been deducted) exceeding Rs. 2 Lakhs. | 1% |
The TCS Rates are applicable as per section 206C of the Income Tax Act,1956. However, the finance ministry of India can make changes to such rates in the Budget of a particular financial year if required.
FAQs
Every seller of a specified good shall collect TCS from the buyer of the goods. TCS is charged on goods like liquor, timber wood, minerals like iron and core, etc.
Following person selling specified goods is considered as the seller for the purpose of TCS:
-Company
-Partnership Firm
-Co-operative society
-Individual or Hindu undivided family(HUF) covered under section 44AB (mandatory Audit)
-The Central and State Government
-Local authority
-Statutory corporation or Authority
If the sales value for any motor vehicle exceeds INR 10 Lakh, TCS is applicable.