amendment of Sec. 206C

[Murari Agrawal]

Dear Experts,

The limit of cash payment of ₹ 2 lakhs is for a particular transaction, or the aggregate of cash paid during the year for multiple transactions.

Thanks.

[Ramesh Rangani]

Hi Murali,

Below may be useful to you:

Importance of above Limits

The limit for applicability of TCS is as follows:

1. Bullion (exceeding ₹ 2 Lakhs),
2. Jewellery (exceeding ₹ 5 Lakhs), or
3. Any other goods or any service (Exceeding ₹ 2 Lakhs)
4. sale of motor vehicle of value exceeding ₹ 10 Lakhs (in cash or cheque)

In case of (iii) above,

If payment consideration (or any part of it) is received in cash of sale of ANY goods/ provision of any service whose consideration exceeds ₹ 2. Lakh, then TCS @ 1% should be collected.

If single party is having multiple bills each less than 2 Lakh, then any amount collected in cash will not be liable to TCS. It is applicable on transaction basis on Single Bill exceeding ₹ 2 lakh.

[Ganeshan Kalyani]

Sir, please find the latest Circular which will clarify your query.

Circular No. 23/2016, New Delhi, dated the 24 June, 2016

AI Summary

Cash Payment Limit of 2 Lakhs Under Section 206C Applies Per Transaction; 1% TCS for Cash Payments Over Limit. A query was raised regarding whether the cash payment limit of 2 lakhs under Section 206C applies to individual transactions or the aggregate of multiple transactions within a year. An expert clarified that the limit applies on a per-transaction basis for goods and services exceeding 2 lakhs, with a 1% TCS applicable if any part of the payment is in cash. Multiple transactions under 2 lakhs each are not subject to TCS. Another expert referred to Circular No. 23/2016 for further clarification on the matter.