The CBDT clarified today that TCS levy will not be applicable when the cash part of the payment is less than Rs 2 lakh even when the total payment is more than the amount. "TCS will not be levied if the cash receipt does not exceed Rs 2 lakh even if the sale consideration exceeds Rs 2 lakh," the Central Board of Direct Taxes said. It illustrated this statement by an example that in a case where a good worth Rs 5 lakh is sold for which the consideration amounting to Rs 4 lakh has been received in cheque and Rs 1 lakh has been received in cash. However, Finance Minister Arun Jaitley in his Budget 2016-17, had imposed TCS of 1% on goods and services purchased in cash in excess of Rs 2 lakh. CBDT has issued a new circular clarifying that the Tax Collected at Source (TCS) levy will not be applicable when the cash part of the payment for certain goods or services is less than Rs 2 lakh, even when the total payment is more than this amount.

Source: dna June 27, 2016 09:47 UTC