Analysis, Income Tax

Simplifying Sub-Sections 206C (1G) & (1H) of Income Tax Act

Sub-sections 206C (1G) and 206C (1H) raise a very fundamental question:

Is income being taxed or expenditure?

For this reason, we feel there will be significant litigation around these sections. While 206C (1G) may impact individuals more and (1H) may be a bone to pick for the corporates, and tax professionals have a fight ahead of them.

Much inconvenience ahead due these sections

Section 206C (1G) in Simple Language

Authorised dealers remitting under LRS or sellers of overseas tour packages receiving amounts greater than 7 Lakhs INR in a year from an Indian remitter/buyer will need to collect the TCS.

If the amount being remitted is a loan obtained from a financial institution towards higher education.

  • If TDS deducted under any other provision.
  • If the remitter is a government authority, consulate, or a foreign trade representation.

See full text of section 206C


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Section 206C (1H) in Simple Language

Suppliers exceeding 10 Crore INR revenue should collect the TCS from the buyer.

Not applicable for goods:

If Pan/Aadhaar is not provided TCS of 1% to be collected.

  • If TDS deducted under any other provision.
  • If the remitter is a government authority, consulate, or a foreign trade representation.

See full text of section 206C


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