Tax Collected at source (TCS) is Income Tax which is required to be collected by the seller (Collector) from the Buyer.
Analysis of New Section 206C(1H)
1. The Government of India has introduced a new Section 206C(1H) with regards to ‘Tax Collection at Source‘. Applicable to everyone having turnover of Rs. 10 crores in last financial year.
2. Every seller who has received any amount as sale consideration above Rs. 50 lakhs from buyer has to collect additional 0.10% [Relaxed rate for FY 2020-21 – 0.075%] of bill amount, collect PAN and pay as TCS every month.
3.TCS to be levied on Sales that is in excess of Rs 50 Lakhs post 01-10-2020.
4. TCS Shall be collected at the time of receipt of sales consideration, hence liable to be collected in the month in which amount is received. Further TCS collected during a month needs to be deposited within 7 days of next month.