Income Tax – Direct Tax Code – DTC – By: – CA DEV KUMAR KOTHARI – Dated:- 14-6-2016 Last Replied Date:- 30-12-1899 – Relevant portions of S.206C regarding obligation for collection in simplified manner. Section 206C for Tax collection at source: In Chapter XVII sub-chapter BB- Collection at source was inserted w.e.f. 01.06.1988. S.206C is about obligations and related liabilities for TCS. The provisions have been amended too many times. In any standard book or website we find more than 50 foot notes about amendments. Related Rules have also been inserted and / or amended many times. To simply convey about new obligations related with TCS on sale of goods and providing services an attempt has been made to put the provisions in simple manner. In the table, in left column relevant provision has been reproduced with highlights for easy analysis and understanding. In right column, main points are mentioned in simple language. Income-tax Act, 1961 [BB.-Collection at source Simplified main p
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(ii), or any service, exceeds two hundred thousand rupees: Rs. two lakh is limit. On reading of provisions, limit seems applicable to each case of receipt of consideration in cash. Provided that no tax shall be collected at source under this subsection on any amount on which tax has been deducted by the payer under Chapter XVII-B.] If tax has been deducted by payer than TCS will not apply- this is presently only for contracts and many services. 1E) Nothing contained in sub-section (1D) in relation to sale of any goods (other than bullion or jewellery) or providing any service shall apply to such class of buyers who fulfil such conditions, as may be prescribed. Exceptions will be as may be prescribed. (1F) Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent. of the sale consideration as income-tax.] Sale
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Failure to collect tax shall not absolve from liability- amount collectible will have to be paid, whether collected or not. [(6A) If any person responsible for collecting tax in accordance with the provisions of this section does not collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax: Full or partial failure in collection and payment will lead the treatment of assessee in default in respect of the tax: (7) Without prejudice to the provisions of sub-section (6), if the [person responsible for collecting tax] does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple interest at the rate of [one] per cent per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date
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rate than the relevant rate specified in sub-section (1) 33[or sub-section (1C) 42[or sub-section (1D)]]. Application by buyer / service receiver and grant for TCS at lower rate. (10) Where a certificate under sub-section (9) is given, the person responsible for collecting the tax shall, until such certificate is cancelled by the Assessing Officer, collect the tax at the rates specified in such certificate. Lower TCS certificate will prevail unless cancelled.(or limit expires- if it is granted for limited period) (11) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (9) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.] Rules will govern application, and grant for lower TCS certif
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