The Ministry of Finance has recently made some amendments to the Finance Act to smoother the tax collection process. The amendment is the introduction of a new sub-section (1H) in section 206 C. The sub-section defines that the person whose annual sale of goods is more than Rs 50 Lakh compared to last year, then the seller needs to collect the tax at a source. There is ample information on this topic and for your smooth understanding, the same has been provided in the form of MCQ. In this article, we will discuss Know all about TCS on sales of goods.
Who is the legit person responsible for the collection of tax on goods sale?
As per the recent changes in the Finance Act, the business owner whose annual sales or turnover is above Rs 10 crore is responsible for the collection of tax on the sales of goods. The same person needs to go for the ITR filing to give the tax on sales of goods.
What provisions do goods contain under Income Tax?
Good is a broad subject and it is undefined in Income Tax, but the definition of goods is mentioned in the Sales of Goods Act. As per this act, goods consisted of all movable items except, money, stocks, shares, and crops.
Moreover, the definition of goods is also available in CGST Act and as per that, goods are every movable item except, finance securities, money, and, items related to the land.
Do property developers come under section 206 C (1H) of the Finance Act?
As stated earlier, goods do not cover immovable items and properties are immovable. Hence, no TCS will be charged against the sales of property.
What is the ideal rate of interest charged on the sales of goods?
On the sales of goods, the interest charged on the seller is 0.1% if the annual turnover is above Rs 50 lakh. However, if the seller fails to produce a PAN Card or Aadhar Card, then a 1% interest rate will be charged to him/her. The seller can give the tax through ITR filing and if failed then further penalty will be imposed on the seller by the tax authority.
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