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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.
 


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.
 


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.

 


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.

 


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.

 

ID: 336 | Views: 828 | Date: 30-06-2016| Posted By:

CA Mohit Jain


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