Cash Purchase Of Goods, Services Over Rs 2 Lakh To Attract 1% Tax

Payment in cash for buying goods and services worth more than Rs 2 lakh with the exception of jewellery will attract 1 per cent tax collected at source (TCS) from today, reported PTI.

The existing TCS of 1 per cent on cash purchase of over Rs 5 lakh of jewellery and over Rs 2 lakh of bullion will continue, tax officials said.

Cash Purchase Of Goods, Services Over Rs 2 Lakh To Attract 1% Tax
The Income Tax Department has been levying 1 per cent TCS on cash purchase of bullion in excess of Rs 2 lakh and jewellery in excess of Rs 5 lakh since July 1, 2012, reported PTI.

The position is maintained and there is no change in the position, the officials said as per the media report.

Finance Minister Arun Jaitley in his Budget 2016-17 imposed TCS of one per cent on goods and services purchased in cash in excess of Rs 2 lakh.

Besides, sale of options will also attract increased Securities Transaction Tax (STT) of 0.05 per cent from tomorrow. Currently, STT is 0.017 per cent.

In the Budget speech, Jaitley had said: "I also propose to collect tax at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh."

"For compliant tax payers with resources, this levy not only advances collection of tax when the expenditure is incurred, but it provides data to tax authorities to identify the persons who incur such expenditure, but may be missing from the tax base.

Read more about: tax
Story first published: Wednesday, June 1, 2016, 12:30 [IST]
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