News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
Service Tax »
  Hotel bills of over Rs 20,000 will now reflect in your ITR; check other changes Income Tax Form 26AS
 How work from home may increase tax liability for certain employees
 How waiver or fall in rent may impact your tax liability
 What to do if you get a scrutiny notice from the tax department
  How many income tax returns (ITRs) are picked up for scrutiny each year
  Notification u/s 138 of the Income Tax Act, 1961 in respect of Competition Commission of India
 You may have to file ITR even though your income might not be taxable
 Tax saving investment options for lower income slabs Use this formula to calculate post-tax return
 Deadline to claim tax benefits under Section 80C expires today ITR Filing FY 2019-20
  Tax on your gold and real estate investments
 Notification of Sovereign Wealth Fund under section 10(23FE) of the Income-tax Act, 1961

1 per cent tax to be levied on car purchase via cash
June, 09th 2016

Buyers of cars and premium two-wheelers who pay more than Rs 2 lakh of purchase price in cash will be levied 1 per cent tax as part of the government's drive to stifle the black economy .

Finance minister Arun Jaitley had announced 1 per cent tax collected at source (TCS) on cars costing more than Rs 10 lakh in his budget speech.

Now, Central Board of Direct Taxes (CBDT) has clarified that car dealers have to collect this tax on every motor vehicle sale to individuals where payment exceedsRs 10 lakh or there is a cash payment of over Rs 2 lakh.

The apex direct taxes body has issued detailed clarification in form of frequently asked questions on the applicability and scope of TCS on sale of motor vehicles following an amendment in this regard in the Finance Act, 2016. The Finance Act has expanded the scope of Section 206 C of the Income Tax Act to include in its ambit sale of goods and service exceeding Rs 2 lakh and sale of motor vehicles over Rs 10 lakh.

Thus, any high-end sale of any goods or service of over Rs 2 lakh in cash would now face 1 per cent TCS.

The move is to discourage deployment of cash in high-end purchases as part of the Narendra Modi-led NDA government's drive against black money.

CBDT has said that TCS on motor-vehicle sale shall apply only at retail level and not on sale by manufacturers to dealers or distributors. It would apply on each sale of motor vehicle and not on aggregate value of sale made during the year by the retailer.

TCS provisions on sale of services and goods was introduced to kill the deployment of domestic black money through high-end purchases in India and therefore discourage its generation itself, said Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP.

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting