Cash purchase of jewellery will attract 1 per cent TCS (tax collected at source) from April 1 if the amount exceeds Rs 2 lakh, as against the current threshold of Rs 5 lakh.
Once the Finance Bill 2017 is passed, jewellery will be treated at par with general goods, which attract 1 per cent TCS on cash purchase above Rs 2 lakh.
The Bill seeks to do away with the threshold of Rs 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealings of over Rs 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by the person receiving the cash.
However, as there is no special provision for TCS on its purchase, jewellery is now being clubbed in general ‘goods’ on which 1 per cent TCS is triggered if a single transaction exceeds Rs 2 lakh in cash.
With this move, the TCS threshold for jewellery will be brought at par with that of bullion from April 1.
The Income Tax Department has been levying 1 per cent tax collected at source on cash purchase of bullion in excess of Rs 2 lakh and jewellery in excess of Rs 5 lakh since July 1, 2012. —PTI
25 Oct 2020
26 Oct 2020