The Finance Act, 2020 extended the ambit of Tax Collection at Source (TCS) to sale of any goods [Section 206C(1H) of the Income Tax Act, 1961]. Now, the same transactions have also been included within the scope of Tax Deduction at Source (TDS) by the Finance Act, 2021 with effect from 1st July, 2021 [Section 194Q]. Though the rate of TDS/TCS is kept at bare minimum level, higher rates are sought to be applied, if the seller/ buyer does not have a PAN linked with AADHAR or has not filed annual tax returns. In addition to posing various practical difficulties in ensuring compliances, the new provisions also raise some significant issues on interpretation of law.
This webinar will focus on the following issues relating to the new TDS and TCS provisions
- Scope of the words/ phrase ‘goods’ and ‘purchase of goods’
- Manner of computing the monetary thresholds prescribed in the Sections
- Applicability of these provisions on works contracts and job work contracts
- Applicability of TDS and TCS provisions on the same transaction
- Inter play with other TDS provisions
- Application of enhanced rates of TDS/ TCS in certain circumstances
Speakers:
- Vasudevan, Executive Partner, L&S
- Sriram, Joint Partner, L&S