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Dear Member,

Based on the many queries received from our members, we have prepared below summary on new provisions for TCS on sale of motor vehicle u/s 206C(1D) & 206C(1F). 

Hope you find the same useful.
 

TCS on Sale of Car / other motor vehicle?
Cases	Total Value of Car Sold	Payment by Cash	Payment by Cheque	Whether TCS will be applicable?
Case 1	500,000	300,000	200,000	Yes, TCS will be collected @ 1% on Rs.300,000 u/s 206C(1D).
Case 2	1,200,000	300,000	900,000	Yes, TCS will be collected @ 1% on Rs.1,200,000 u/s 206C(1F).
Case 3	1,200,000	Nil	1,200,000	Yes, TCS will be collected @ 1% on Rs.1,200,000 u/s 206C(1F).
Case 4	500,000	Nil	500,000	No, TCS is not applicable.
Case 5	500,000	100,000	400,000	No, TCS is not applicable

Query 1: Whether TCS will be applicable on sale of car for Rs.500,000. Out of which Rs.300,000 is paid in cash and Rs.200,000 by cheque?

 

Reply:  Yes, TCS will be collected @ 1% on Rs.300,000 u/s 206C(1D).

Reasoning:

1.    Since total sale consideration is below Rs.1,000,000 therefore section 206C(1F) is not applicable.

 

2.    Since payment made in cash is exceeding Rs.200,000, therefore section 206C(1D) is applicable and TCS u/s 206C(1D) will be collected only on cash component i.e. Rs.300,000.
 

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Query 2: Whether TCS will be applicable on sale of car for Rs.1,200,000. Out of which Rs.300,000 is paid in cash and Rs.900,000 by cheque?

 

Reply:  Yes, TCS will be collected @ 1% on Rs.1,200,000 u/s 206C(1F).

Reasoning:

1.    Since total sale consideration is above Rs.1,000,000 therefore section 206C(1F) is applicable and TCS u/s 206C(1F) will be collected on Total sale consideration i.e. 1,200,000. Mode of payment is irrelevant u/s 206C(1F).

 

2.    Since TCS has been collected u/s 206C(1F) therefore section 206C(1D) is not applicable.
 

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Query 3: Whether TCS will be applicable on sale of car for Rs.1,200,000. Entire payment is made by cheque?

 

Reply:  Yes, TCS will be collected @ 1% on Rs.1,200,000 u/s 206C(1F).

Reasoning:

1.    Since total sale consideration is above Rs.1,000,000 therefore section 206C(1F) is applicable and TCS u/s 206C(1F) will be collected on Total sale consideration i.e. 1,200,000. Mode of payment is irrelevant u/s 206C(1F).

 

2.    Section 206C(1D) is not applicable in this case.

 

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Query 4: Whether TCS will be applicable on sale of car for Rs.500,000. Entire payment is made by cheque?

 

Reply:  No, TCS is not applicable.

 

Reasoning:

1.    Since total sale consideration is below Rs.1,000,000 therefore section 206C(1F) is not applicable.

 

2.    Since no payment is made in cash, therefore section 206C(1D) is also not applicable.

 

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Query 5: Whether TCS will be applicable on sale of car for Rs.500,000. Out of which Rs.100,000 is paid in cash and Rs.400,000 by cheque?

 

Reply:  No, TCS is not applicable.

 

Reasoning:

1.    Since total sale consideration is below Rs.1,000,000 therefore section 206C(1F) is not applicable.

 

2.    Since payment made in cash is not exceeding Rs.200,000, therefore section 206C(1D) is also not applicable.

 

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