ALL >> Investing---Finance >> View Article
Understanding Tax Collected At Source (tcs) For The Gold Industry

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.
Add Comment
Investing / Finance Articles
1. How To Protect Your Crypto Wallet: Essential Tips Beyond PasswordsAuthor: Eldon Ryder
2. Ipo Grey Market Premium (gmp) Guide | Live & Upcoming Ipo Gmp Trends
Author: finowings
3. Top Benefits Of Enrolling In A Certificate Course In Banking
Author: sandeep
4. Crizac Ipo Gmp 2025: Key Dates, Price Band & Gmp Update
Author: finowings
5. Stock Market Advisory: The Growing Importance Of Professional Stock Advisory Services
Author: Vinay
6. What Is Sip And How Does It Help Build Wealth?
Author: Sagar Shah
7. Choosing The Right Accounting Firm In East And South Auckland: What You Need To Know
Author: WhizBiz
8. Goldco Review: Best Ira Guide For Investors, Retirement Planners, & Retirees
Author: Gold and Silver Investment News
9. Navigating Financial Growth With Avendus
Author: Drishti Desai
10. The 4 Types Of Income You Need For True Financial Freedom
Author: Wealth Samurai
11. Why Hyderabad Millennials Are Choosing Personal Loans Over Credit Cards
Author: anilsinhaanni
12. How A Retail Lending Specialist Can Help You Secure The Best Loan Deals
Author: sandeep
13. How Knee Replacement Improves Quality Of Life For Arthritis Patients
Author: uttam
14. Stock Market Advisory: Unlocking Investment Success With Share Market Advisory Services
Author: Vinay
15. The Rise Of Investment Banking Companies In Hyderabad’s Financial Scene
Author: Verity knowladge solutions