TCS Levy on Sale of Goods - Tax Collection at Source (TCS)

By Karan Gupta | 6 min read

What's in the page

Finance Act 2020


Tax Collection at Source (TCS)

In the recently enacted Finance Act, 2020, a new provision has been introduced in the Income-tax Act, 1961 concerning levy of Tax Collection at Source (TCS) on sale of goods. The same is applicable in case of sellers having total turnover exceeding INR 10 crores during preceding financial year. Such sellers shall be liable to collect TCS at the rate of 0.1 percent on sale consideration received from buyer in excess of INR 50 lakhs during the year. In non PAN/ Aadhaar cases, higher TCS rate of 1 percent shall be applicable.

The above provisions shall be applicable w.e.f. Oct 1, 2020.

Further, TCS under these provisions shall not get attracted in either of the following cases:

1. In case of export/import of goods

2. Where buyer has deducted TDS in accordance with the applicable provisions

3. Where seller is liable to collect TCS under other provisions

4. In case of sale to specified persons (such as Government, embassy local authority etc)

Key Points