Cash purchase of jewellery will attract 1% TCS (Tax Collected at source) from April 1 if the amount exceeds Rs. 2 Lakhs, as against the current threshold of 5 Lakh. The bill seeks to do away with the threshold of Rs. 5 lakh on jewellery purchases of applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealing of over 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash. The Income Tax Act provide for 1% TCS on cash purchase of goods or services above 2 lakh. The definition of goods also include jewellery and hence 1% TCS would be applicable on jewellery purchased above 2 Lakh in cash.
Submitted by business_centrik on 20/02/2017