Rate of TCS on Sale of Coins, Bullion or Jewellery of 1%. Tax Collection at Source if Sale in cash of bullion in excess of Rs 2 lakhs and Jewellery in excess of Rs 5 Lakhs.
CLARIFICATION ON AMENDMENT TO SECTION 206-C OF INCOME TAX ACT DEALING WITH TAX COLLECTION AT SOURCE (TCS) ON SALE OF BULLION OR JEWELLERY IN CASH.
Currently, sale in cash of bullion (excluding coin or any other article weighing 10 grams or less) in excess of Rs 2 lakhs or jewellery in excess of Rs.5 lakhs is subject to Tax Collection at Source (TCS) @ 1%. As coins were neither included in bullion nor in jewellery, therefore, coins, even when amounting to more than Rs. 2 lakh in value, were being sold in cash without TCS.
The Finance Bill, 2013 proposes to delete exclusion of coins/articles weighing 10 grams or less from bullion. Hence, the sale of bullion (including coins/articles) in cash in excess of Rs 2 lakh shall be subject to TCS @1%. Similarly, sale of jewellery in cash in excess of Rs 5 lakh shall be subject to TCS @1%. It is not a new levy of tax but continuation of old levy except withdrawal of exemption in the case of coins/articles weighing 10 grams or less.
Reference: Section 206C(1D) for TCS on Bullion and Jewellery
(1D) Every person, being a seller, who receives any amount in cash as consideration for sale of bullion (excluding any coin or any other article weighing ten grams or less) or jewellery, shall, at the time of receipt of such amount in cash, collect from the buyer, a sum equal to one per cent of sale consideration as income-tax, if such consideration,—
(i) for bullion, exceeds two hundred thousand rupees; or
(ii) for jewellery, exceeds five hundred thousand rupees.