About TCS compliance (Section 206C(1D) WEF 01.06.2016
The New TCS compliance regime W.E.F. 01.06.16 - Salient Features*
*[Section 206C(1D)]:*
Every *“Seller”* who *receives any amount in cash* as a consideration for sale of -
- Bullion (exceeding Rs. 2 Lacs),
- Jewellery (exceeding Rs. 5 Lacs), or
- Any other goods or any service (exceeding Rs. 2 Lacs)
shall, at the time of receipt of such amount in cash, collect from the buyer, TCS @ 1% of sale consideration.
*No TCS shall be required on any amount on which TDS has been made by the payer under chapter XVII-B.*
*NOTES:*
1) *Seller* receiving consideration for sale of motor vehicle of value exceeding Rs. 10 Lacs (in cash or cheque), shall, collect TCS @ 1% of sale consideration. *[S.206C(1F)]*
2) Tax collected at source shall be deposited within one week from the last day of the month in which collection is made.
3) Quarterely TCS statement in form 27EQ shall be required to be filed on or before 15th June, 15th Oct., 15th Jan or 15th May as the case may be. *[Rule 31AA]*
4) TCS certificate in form 27D shall be furnished to the collectee on or before 30th June, 30th Oct., 30th Jan or 30th May as the case may be. *[Rule 37D]*
5) *”Seller”* means person whose turnover exceeds Rs. 1 Crores/ 50 Lacs in F.Y. preceding the F.Y. in which the goods are sold/ services are provided.
6) Buyer can obtain lower TCS certificate on making an application in form 13 from the A.O. *[S. 206C(9) r.w.r. 37G]*
7) Pearson who fails to make TCS or after collection fails to pay the tax as required, shall be deemed to be an ‘assessee in default’. *[S. 206C(6A)]*
*ALERT:*
*Facility of not to be treated as assessee in default due to failure to make TCS on furnishing of ROI, payment of due taxes etc. by the concerned buyer and furnishing of certificate in form 27BA by defaulter is not available to persons referred to in section 206C(1D) as above!!*
*Useful reference:*
Where in case, assessee had not collected tax u/s 206C from buyer, it was held that before proceeding against assessee, it is necessary to find out whether buyer had paid tax in accordance with the provisions of the act and only in event buyer has not paid tax, then the authorities can proceed against assessee, who was under obligation to collect tax and remit to Govt.
[_Shri Manjunath Wines v. CIT (2011) 202 Taxman 620 (Kar)_]
[5/24, 09:25] +91 98311 81816: *SALARIED EMPLOYEES TO SUBMIT PROOF FOR LTA, HRA CLAIMS*
The CBDT (Central Board of Direct Taxes) has introduced a new form (Form 12 BB) for claiming tax deduction towards LTA, LTC, HRA & interest paid for home loans. The new form mandates people to furnish proof of travel while claiming LTA, LTC, and details of landlord in case of HRA claims. Let us understand this in detail:-
*Why this Rule?*
The main reason behind introducing this rule is to plug the loopholes under tax laws by tightening the entire procedure for claiming these tax exemptions. This becomes more important because there was no standard or prescribed format until now for filing these declarations. And in the Budget 2015, the Finance Act had already introduced Section 192(2D) of the Income Tax Act mandating employers to collect all necessary evidences, but the rules and form were yet to be prescribed. The same has been done now.
*What is this form about?*
The declaration needs to be filed for claiming deductions in a prescribed form i.e. Form 12 BB as set up under rule 26C.
*What is the obligation on the Employer?*
Earlier the employers were not under any statutory obligations for collecting bills or other proofs in order to prove the fact that their employees have actually utilized the money they are claiming towards these claims.
But, the current amendment with the introduction of this rule will now make all the employers obligated to collect all the relevant information in the prescribed format apart from collecting the proof of evidence, before they can allow the respective benefits under various tax benefits to the employees.
Details needed to furnish LTA, LTC and HRA claims
The circular as issued by the government has not specified the documents required to be submitted for claiming deductions but the existing documents that employees used to provide should hold good. Following are the documents which are required to claim these benefits:-
*HRA:*
As per the notification issued by the government, a person claiming HRA (Housing Rent Allowance) for over Rs. 1 lakh needs to furnish name, address and PAN i.e. Permanent Account Number of the landlord, apart from giving the rent receipts. With this the government can start tracking the fraudulent claims and can also verify whether the rent received by the landlord has been duly disclosed in their tax-return.
*LTA/LTC:*
To claim LTA (Leave Travel Allowance) or LTC (Leave Travel Concession), people need to provide the evidence of expenditure, and submit boarding pass and tickets for claiming LTA or LTC.
*Housing Loan:*
To claim deduction on the interest on a housing loan, people need to provide PAN of the lender and their name and address.
*Deductions u/s Chapter VI-A*
People need to submit relevant proof for claiming deductions under chapters VIA(A) and VI-A that cover Sections 80C, 80CCC, 80CCD, 80E, 80G, 80TTA. Sections 80CCC, 80CCD and section 80C allow a deduction of Rs. 1.5 lakhs on specified investments.
*What will be the impact of this new Rule?*
The new rule and the forms will make it really easy for both the taxpayer and the employer because it brings standardization which will help employees and employers both. Moreover from the government's point of view, the new format will ensure collection and maintenance of information, and will assist them in streamlining their assessment process and curb the malpractice of fake claims.
*When will this rule come into effect?*
The rules will be applicable from June 1, 2016.
*[Section 206C(1D)]:*
Every *“Seller”* who *receives any amount in cash* as a consideration for sale of -
- Bullion (exceeding Rs. 2 Lacs),
- Jewellery (exceeding Rs. 5 Lacs), or
- Any other goods or any service (exceeding Rs. 2 Lacs)
shall, at the time of receipt of such amount in cash, collect from the buyer, TCS @ 1% of sale consideration.
*No TCS shall be required on any amount on which TDS has been made by the payer under chapter XVII-B.*
*NOTES:*
1) *Seller* receiving consideration for sale of motor vehicle of value exceeding Rs. 10 Lacs (in cash or cheque), shall, collect TCS @ 1% of sale consideration. *[S.206C(1F)]*
2) Tax collected at source shall be deposited within one week from the last day of the month in which collection is made.
3) Quarterely TCS statement in form 27EQ shall be required to be filed on or before 15th June, 15th Oct., 15th Jan or 15th May as the case may be. *[Rule 31AA]*
4) TCS certificate in form 27D shall be furnished to the collectee on or before 30th June, 30th Oct., 30th Jan or 30th May as the case may be. *[Rule 37D]*
5) *”Seller”* means person whose turnover exceeds Rs. 1 Crores/ 50 Lacs in F.Y. preceding the F.Y. in which the goods are sold/ services are provided.
6) Buyer can obtain lower TCS certificate on making an application in form 13 from the A.O. *[S. 206C(9) r.w.r. 37G]*
7) Pearson who fails to make TCS or after collection fails to pay the tax as required, shall be deemed to be an ‘assessee in default’. *[S. 206C(6A)]*
*ALERT:*
*Facility of not to be treated as assessee in default due to failure to make TCS on furnishing of ROI, payment of due taxes etc. by the concerned buyer and furnishing of certificate in form 27BA by defaulter is not available to persons referred to in section 206C(1D) as above!!*
*Useful reference:*
Where in case, assessee had not collected tax u/s 206C from buyer, it was held that before proceeding against assessee, it is necessary to find out whether buyer had paid tax in accordance with the provisions of the act and only in event buyer has not paid tax, then the authorities can proceed against assessee, who was under obligation to collect tax and remit to Govt.
[_Shri Manjunath Wines v. CIT (2011) 202 Taxman 620 (Kar)_]
[5/24, 09:25] +91 98311 81816: *SALARIED EMPLOYEES TO SUBMIT PROOF FOR LTA, HRA CLAIMS*
The CBDT (Central Board of Direct Taxes) has introduced a new form (Form 12 BB) for claiming tax deduction towards LTA, LTC, HRA & interest paid for home loans. The new form mandates people to furnish proof of travel while claiming LTA, LTC, and details of landlord in case of HRA claims. Let us understand this in detail:-
*Why this Rule?*
The main reason behind introducing this rule is to plug the loopholes under tax laws by tightening the entire procedure for claiming these tax exemptions. This becomes more important because there was no standard or prescribed format until now for filing these declarations. And in the Budget 2015, the Finance Act had already introduced Section 192(2D) of the Income Tax Act mandating employers to collect all necessary evidences, but the rules and form were yet to be prescribed. The same has been done now.
*What is this form about?*
The declaration needs to be filed for claiming deductions in a prescribed form i.e. Form 12 BB as set up under rule 26C.
*What is the obligation on the Employer?*
Earlier the employers were not under any statutory obligations for collecting bills or other proofs in order to prove the fact that their employees have actually utilized the money they are claiming towards these claims.
But, the current amendment with the introduction of this rule will now make all the employers obligated to collect all the relevant information in the prescribed format apart from collecting the proof of evidence, before they can allow the respective benefits under various tax benefits to the employees.
Details needed to furnish LTA, LTC and HRA claims
The circular as issued by the government has not specified the documents required to be submitted for claiming deductions but the existing documents that employees used to provide should hold good. Following are the documents which are required to claim these benefits:-
*HRA:*
As per the notification issued by the government, a person claiming HRA (Housing Rent Allowance) for over Rs. 1 lakh needs to furnish name, address and PAN i.e. Permanent Account Number of the landlord, apart from giving the rent receipts. With this the government can start tracking the fraudulent claims and can also verify whether the rent received by the landlord has been duly disclosed in their tax-return.
*LTA/LTC:*
To claim LTA (Leave Travel Allowance) or LTC (Leave Travel Concession), people need to provide the evidence of expenditure, and submit boarding pass and tickets for claiming LTA or LTC.
*Housing Loan:*
To claim deduction on the interest on a housing loan, people need to provide PAN of the lender and their name and address.
*Deductions u/s Chapter VI-A*
People need to submit relevant proof for claiming deductions under chapters VIA(A) and VI-A that cover Sections 80C, 80CCC, 80CCD, 80E, 80G, 80TTA. Sections 80CCC, 80CCD and section 80C allow a deduction of Rs. 1.5 lakhs on specified investments.
*What will be the impact of this new Rule?*
The new rule and the forms will make it really easy for both the taxpayer and the employer because it brings standardization which will help employees and employers both. Moreover from the government's point of view, the new format will ensure collection and maintenance of information, and will assist them in streamlining their assessment process and curb the malpractice of fake claims.
*When will this rule come into effect?*
The rules will be applicable from June 1, 2016.
Comments
Post a Comment