Budget 2022 was presented on1st February 2022 with historic least number of changes in Income tax. A complete list of TCS (tax collected at source) rate along with related transactions and budget proposals for financial year 2022-23 (AY-2023-24) is provided in the table given below.-
TCS Rate Chart for FY 2022-23 (AY 2023-24)
|Section||Nature of transaction||TCS rate applicable for FY 2021-22|
|206C(1)||Sale of Alcoholic liquor for human consumption||1%|
|206C(1)||Sale of Tendu Leaves||5%|
|206C(1)||Sale of ||2.5%|
|206C(1)||Sale of timber obtained by any mode other than under a forest lease||2.5%|
|206C(1)||Sale of any other forest produce not being timber or tendu leaves||2.5%|
|206C(1)||Sale of scrap||1%|
|206C(1)||Minerals, being coal or lignite or iron ore||1%|
|206C(1C)||Grant of licence or lease etc of Parking lot||2%|
|206C(1C)||Grant of licence or lease etc of Toll Plaza||2%|
|206C(1C)||Grant of licence or lease etc of Mining or quarrying||2%|
|206C(1F)||Sale of a motor vehicle of the value exceeding Rs. 10 Lakh||1%|
|Remittance under Liberalised Remittance Scheme of Reserve Bank of India exceeding Rs. 7 Lakh (a) If the remittance is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education||0.5% (w.e.f 1-10-20)|
|Remittance under Liberalised Remittance Scheme of Reserve Bank of India exceeding Rs. 7 Lakh (b) if the remittance is other than mentioned in (a) above.||5% (w.e.f 1-10-20)|
|Sale of the Overseas Tour Package||5% (w.e.f 1-10-20)|
|Sale of goods in excess of Rs. 50 Lakh in a year by a seller whose turnover is more than Rs. 10 Crore||0.1% ((w.e.f 1-10-20)|
(1) Section 206C(1H) after introduction of section 194Q in budget 2021 (applicable from 1.7.2021)
- In case of both sections 206C & 194Q, limit of turnover is 10 crore, TDS/TCS rate is 0.1% for transaction above 50 lakh only on value exceeding 50 lakh But 194Q is for buyer point of view for deducting TDS and 206C is for seller point of view for collecting TCS.
- In case both seller & buyer have turnover above 10cr. then 194Q will be given preference hence buyer is required to deduct TDS, and seller will not be liable to deposit TCS. Hence 194Q will be preferred over 206C.
Both these provisions are distinguished in the below table:
|Conditions||194Q-TDS on purchase of goods||206C(1H)-TCS on Sale of goods|
|Who is liable for deduction/collection||Buyer is liable to deduct the tax||Seller is liable to collect the tax|
|Turnover limit of deductor or collector||The total sales, gross receipts or turnover of the buyer from the business should exceed Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are purchased||The total sales, gross receipts or turnover of the collector from the business should exceed Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are sold|
|Threshold limit of purchase/sale||If the value of purchase exceeds Rs. 50 lakhs||If the value of sales exceeds Rs. 50 lakhs|
|Amount on which tax to be deducted/collected||On the amount of purchase in excess of Rs. 50 lakhs||On the amount of sale consideration in excess of Rs. 50 lakhs|
|Time of deduction/collection||At the time of credit or payment, whichever is earlier||At the time of receipt|
|Preference to be given||Purchaser is first liable to deduct the tax if the transaction could be subject to both provision||Seller shall be liable to collect the tax only if the purchaser is not liable to deduct the tax or purchaser failed to deduct tax|
(2) Section 206CCA inserted by budget 2021:-
Section 206CCA provides special provision for collection of tax at source for non-filer of income tax return at higher of the following TDS rates which is applicable for non-filer of ITR –
- twice the rate specified in the relevant provision of the Act; or
- the rate of 5%
Upto FY 21-22, The provision of 206AB is applicable to a person who has not filed the returns of of income for both of the two assessment years relevant to two previous years immediately prior to the previous year in which tax is required to deducted, for which the time limit of filing return of income under section section (1) of section 139 has expired
aggregate of TDS & TCS in his case is Rs 50000 or more in each of these two previous years. The specified person shall not include a non-resident who does not have a permanent establishment in India.
((W.e.f 1st April 2022, specified person” shall mean a person who has not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired and the aggregate of tax deducted at source and tax collected at source in his case is Rs. 50000/- or more in the said previous year)
(3) TCS Rate if valid PAN not furnished:-
As per section 206CC, if the buyer does not furnish his PAN (or Aadhaar No.) to the seller, then the rate of TCS shall be higher of-(a) twice the prescribed rate, or(b) 5 per cent
except for TCS on Sale of goods in excess of Rs. 50 Lakh in a year by a seller whose turnover is more than Rs. 10 Crore for which 5 per cent is substituted with 1 per cent.
(4) Surcharge on TCS:-
- Surcharge is not to be added in rate of TCS in case of resident individual/ HUF /Firm/LLP/ AOP / BOI/Domestic Company.
- In case of Non-resident & Foreign company, Surcharge is to be added in the rates of TCS at the following rates.
Non Residents other than company (if income exceeds Rs. 50 Lakh but not exceeds Rs. 1 Crore) 10% Non Residents other than company (if income exceeds Rs. 1 Crore) 15% Non Resident companies if income is between Rs. 1 Crore and 10 Crore 2% Non Resident companies if income is greater than Rs. 10 Crore 5% Surcharge on Co-operative Society & Firms in case of Non-Residents (if income exceeds Rs. 1 crore) 12%
(5) Education Cess & SHEC on TCS:-
- EC & SHEC is not to be added in rates of TCS in case of resident Individual/HUF/Firm/ AOP/ BOI/ Domestic Company.
- Education Cess @ 2% & SHEC @ 1% is deductible at source in case of non-residents and foreign company.
(4) Finance Act 2017, has removed the requirement of collection of tax at source in case of receipt of cash for sale of more than Rs.5 Lakhs in case of Jewellery and Rs. 2 Lakhs in case of Bullion, other goods.
(5)As per Section 206C(7), If the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it as required, 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 on which the tax was actually paid and such interest shall be paid before furnishing the quarterly statement for each quarter.