New TCS Provision under Income Tax and its Implications
TCS i.e. Tax Collection at Source has been there in Income Tax Acts for Decades. However, the government is trying to increase the scope of TCS gradually to plug the revenue leakage. Through Finance Act 2020, Section 206C was amended to include certain items on which TCS becomes applicable effective October 01, 2020. In this analysis, we are not discussing the TCS provisions which existed before the current amendment. We will be only focussing on New TCS Provisions effective October 01, 2020. Sub-sections (1G), (1H), (1-I) and (1J) were inserted in Section 206C of the Income Tax Act w.e.f. 1-10-2020. We have summarized all changes and its clarifications at one place as below: S.No Details TCS Percentage TCS Percentage for FY 2020-21 1 TCS on remittance out of India other than Tour Package. TCS on remittance out of India under the Liberalised Remittance Scheme of the Reserve Bank of India for other than Tour package purchase 5% on payment more than Rs. 7 lakhs 3.75% 2 T...