123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

Understanding Tax Collected At Source (tcs) For The Gold Industry

Profile Picture
By Author: Divya
Total Articles: 8
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

The country awaits the Budget with bated breath for the impact of it and the ripples it creates is felt throughout the year. This year the budget was a nail biting experience. The entire country was under lockdown and for the first time India experienced a slowdown in economy that had not been experienced in years. The blow of COVID-19 was a global one, slowing down most economies and hampering businesses. what everyone awaited now from the government was a tax relief.

Finance Minister Nirmala Sitharaman, however, in the budget of 2020-21 announced the extension of the scope of the tax collected at source on gold industry.
Since, buying gold in this country seems to be the best investment asset as well as the easiest way of turning black money into white, it was obvious for the government to bring it under a larger tax ambit and create transparency.

This new move by the government was received by the industry with a like warm response. While the market for gold has been bullish and people are thronging to buy gold and will continue to do so until the uncertainty around the COVID-19 and other geo-political factors die down, gold dealers across the country have expressed concern over the implementation of this new tax.
Let us first understand the provisions of this tax:
• The law states that the seller is entitled to collect the tax from the buyer at the time of buying goods. With respect to the gold industry if the annual turnover of the seller exceeds 100 million rupees in the current financial year then this is applicable.
• TCS is collected from a buyer when the total amount of goods bought exceeds 5 million rupees in the financial year.
• The rate for the tax is at 0.1%. This amount however is based on the sale done by the seller to the buyer. TCS is applicable only when the buyer exceeds the limit of 5 million rupees in the financial year.
• The tax is refundable to the buyer after completing all the income tax return formalities and complete assessment of the same.

This tax was brought to force in April 2020, however its implementation was delayed till October 2020 for a smooth transition and compliance from the industry. This was requested by members of the industry. The Finance Minister in order to reduce the burden on the gold industry amidst the pandemic reduced the TCS temporarily to 0.075% until 31 March 2021. After this the rate will be restored back to its previous decided one under the budget.

TCS has been implemented with a view to bring in transparency and keep a track of all B2B sales exceeding 5 million in a financial year. However, industry people argue that this had created a blockage of their working capital. This has affected the top gold bullion dealers which has been passed on to other participants in the gold supply chain.
Whether you buy gold online or offline the effect of TCS will be felt on large scale in all the households in the country.

Total Views: 68Word Count: 508See All articles From Author

Add Comment

Investing / Finance Articles

1. Usda Mortgage And Home Loans New York
Author: vikram kumar

2. Usda Home Loan And Home Loans Mississippi
Author: vikram kumar

3. Usda Loans And Usda Home Loans Minnesota
Author: vikram kumar

4. What Is Fastag? How Does It Work?
Author: Anil Sukhchandani

5. What’s Your Retirement Game-plan? Invest In Mutual Funds
Author: QuantumAMC

6. Top Benefits Of Getting A Finance Broker In Brisbane
Author: surelend

7. What Are Equity Mutual Funds And Its Type?
Author: Quantum Mutual Fund

8. What Are Hybrid Mutual Funds And Its Type?
Author: Quantum Mutual Fund

9. 4 Mistakes Mutual Fund Investors Make
Author: QuantumAMC

10. A Green New Year Resolution
Author: QuantumAMC

11. Distribution Waterfall
Author: Ridzi Arora

12. Top 30 Basic Terms Used By External Auditors In Dubai
Author: AviaanAccounting

13. Best Investment Company In Trichy, Chennai | Hunch Trading
Author: Hunch trading

14. How To Buy Shares From Zerodha?
Author: Suman Poddar

15. Mirror, Mirror... Which Is The Best Asset Class Of Them All?
Author: QuantumAMC

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: