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May 31, 2021

Know all about TCS provisions for FY 2021-22

by Mahesh Mara in Income Tax

Know all about TCS provisions for FY 2021-22

Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers. The person collecting the TCS/ seller is known as collector and the buyer is known as collectee. As per section 206C seller shall collect tax from buyer at the time of debiting the account or receipt of amount of buyer whichever is earlier.

What are the rates of TCS for FY 2021-22?

The following are the rates of TCS different of goods specified as per section 206(1) for FY 2021-22:

Type of GoodsRate
Section 206(1) Alcoholic liquor for human consumption1%
Section 206(1) Timber obtained by any mode other than under a forest lease2.5%
Section 206(1) Timber obtained under a forest lease2.5%
Section 206(1) Any other forest produce not being timber or tendu leaves2.5%
Section 206(1) Tendu leaves5%
Section 206(1) Scrap1%
Section 206(1) Minerals being lignite, coal and iron ore1%
Section 206(1F) Purchase of Motor vehicle exceeding Rs. 10 Lakhs1%
Section 206(1) Parking lot2%
Section 206(1) Toll Plaza2%
Section 206(1) Mining and Quarrying2%
Section 206(1G) Remittance (Liberalized remittance scheme) exceeding Rs. 7 Lakhs5%
Section 206(1G) Overseas Tour Packages5%
Section 206(1H) Sale of Goods exceeding Rs. 50 Lakhs0.1%

Note: If the collectee does not furnish PAN to collector or furnishes incorrect PAN, then collector shall collect TCS at Double the rate specified OR 5% Whichever is Higher.

Who are sellers/ collector of TCS?

The following are the persons or organisation liable for collecting TCS:

  • Central Government
  • State Government
  • Local Authority
  • Statutory authority or corporation
  • Company
  • Partnership firms
  • Cooperative society
  • Any individual or HUF who has total sales/ gross receipts that exceeds the specified monetary limit as mentioned under section 44AB of the income tax act

Who is the buyer or collectee not liable for TCS?

The following are the persons or organization not liable for TCS:

  • Public sector entities or companies
  • Central Government
  • State Government
  • Embassy of High Commission
  • Consulate and Other trade representation of a foreign Nation
  • Clubs such as sports club and social clubs

Due dates for TCS quarterly Returns:

QuarterPeriodDue Date
Q11 April 2021 – 30 June 202115th July 2021
Q21 July 2021 – 30 September 202115th October 2021
Q31 October 202 – 31 December 202115th January 2022
Q41 January 2021 – 31 March 202215th May 2022

What are the Due dates for TCS payment?

The due date payment for both government and non-government collectors is as under:

MonthDue date
April 20217th May 2021
May 20217th June 2021
June 20217th July 2021
July 20217th August 2021
August 20217th September 2021
September 20217th October 2021
October 20217th November 2021
November 20217th December 2021
December 20217th January 2022
January 20227th February 2022
February 20227th March 2022
March 20227th April 2022

What is the consequence of late payment of TCS?

In case the collector responsible for collecting tax at source does not collect it or after collecting fails to pay it to the Government, he shall be liable to pay simple interest at the rate of 1% 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.

What is the Penalty for failure to collect TCS?

If any person fails to collect the whole or any part of the tax then such person shall be liable to pay by way of penalty as per section 271CA, a sum equal to the amount of tax which such person failed to collect.

Who are Exempt from payment of TCS?

Following are the persons exempt from payment of TCS:

  • TCS in case of goods prescribed above shall not be applicable if goods purchased for personal consumption
  • TCS is not applicable if buyer is resident and furnish declaration that such goods used in manufacturing of any article or power generation.

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