Currently, sale in cash of bullion (excluding coin or any other article weighing 10 grams or less) in excess of Rs 2 lakh or jewellery in excess of Rs.5 lakh is subject to Tax Collection at Source (TCS) @ 1%. As coins were neither included in bullion nor in jewellery, therefore, coins, even when amounting to more than Rs. 2 lakh in value, were being sold in cash without TCS.

The Finance Bill, 2013 proposes to delete exclusion of coins/articles weighing 10 grams or less from bullion. Hence, the sale of bullion (including coins/articles) in cash in excess of Rs 2 lakh shall be subject to TCS @1%. Similarly, sale of jewellery in cash in excess of Rs 5 lakh shall be subject to TCS @1%.

It is not a new levy of tax but continuation of old levy except withdrawal of exemption in the case of coins/articles weighing 10 grams or less.

DSM/RS/ka

(Release ID :95403)

Tax Collection at Source on bullion and jewellery now covers coins and small articles, ending their prior exemption. Amendment narrows the exclusion under Tax Collection at Source so that cash sales of bullion, expressly including coins and small articles previously excluded, exceeding the statutory value threshold are subject to TCS at the prescribed rate; cash sales of jewellery above the statutory threshold continue to attract TCS. The change withdraws the prior exemption for coins/articles of limited weight and is not a new levy but an extension of TCS coverage to previously excluded bullion items.