CBDT has provided major relief by
issuing a Circular No.23/2016 on 24.06.2016 with respect to further amendment
to amended Section 206C.
As per the amended Section 206C of
Income Tax Act where as Section 206C(1D) was added to it, it was provided that
the seller shall collect tax @1% from the purchaser on sale in cash of certain
goods or provision of services exceeding Rs.2 Lacs.
Now CBDT has clarified the applicability
of the provisions wrt TCS where sale consideration is partly in cash and partly
in cheque. CBDT has given a relief by issuing a circular which provides a
under:
ü
Tax collection at
source will not be levied if the cash receipt does not exceed Rs.2 Lacs even if
sale consideration is for than Rs.2 Lac.
ü
The TCS shall be
levied only on cash component of the sale consideration and not on total
consideration.
Example: Goods worth Rs.5 Lacs sold but cash
consideration is Rs.1 Lac then no TCS and if Cash consideration is Rs.2.5 Lacs
then TCS will be applicable on Rs.2.5 Lacs and not on Rs.5 Lacs.