As per Section 206C (1H) of the Income Tax Act 1961
Every person, being a seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 per cent of the sale consideration exceeding fifty lakh rupees as income-tax:
Provided that if the buyer has not provided the Permanent Account Number or the Aadhaar number to the seller, then the provisions of clause (ii) of sub-section (1) of section 206CC shall be read as if for the words “five per cent”, the words “one per cent” had been substituted:
Provided further that the provisions of this sub-section shall not apply, if the buyer is liable to deduct tax at source under any other provision of this Act
Case study
1.TCS on Sales invoice
On 1st Oct 2020, Mohan Traders received advance amount from Mr. Ramesh worth Rs 48,00,000 against sales . On 2nd oct 2020 raise sales bills worth 43,22,034 ( GST@18% Rs. 7,77,966) to Mr. Ramesh and balance amount received of Rs. 3,00,000. from Mr. Ramesh.
2. TCS on Receipt Entry
On 20th September 2020, Sales transaction worth for Rs 60,00,000 already made to M/s ABC LTD. and against which two receipts are going to take place in the month of October 2020. 1st is on 5 th oct 2020 of Rs. 1,00,000/- and 2nd is on 6th oct 2020 of Rs. 59,00,000.