TCS on the sell of Motor Vehicle

TCS on the sell of Motor Vehicle

As we know, In this world, every person did any activity to be a seller or buyer. When a person acts as a seller when he sale a motor vehicle and then receives an amount as a consideration of goods which value is exceeding ten lakh then he received a receipt from the buyer, a sum equal to 1% of the sale consideration as income tax.
Before some time earlier, only from the jewelry, bullion, tendu leaves, and scrap, etc only on through this stuff we collect the TCS. But now things have been changed, the procedure of collecting TCS also changed and the purpose of changing the procedure of collecting the  TCS is for stop the tax evasion and transactions of black money, As we all are aware, In 2012, some certain transactions affecting customer- the purchasing power of customer go to its ambit, sale of bullion which is exceeding Rs. 2 lakh and jewelry exceeding Rs. 5 lakh and receipts in cash. In 2016, the sale transaction goes to another level, the sale of the motor vehicle was exceeding Rs. 10 lakh and receipt of money for the sale of goods and provision of services exceeding Rs. 2 lakh, in such cases the seller collect 1%additional amount from the purchaser then pay it to the government.
The provision of the motor vehicle does not only belong to the business who sale that goods or provide services, but this provision of the motor vehicle also belongs to even those person or salaried employee who sale their car more than Rs. 10 lakh, but there is also no need to collect TCS from the buyer. Even the provision of a vehicle can be applied to those manufactures who selling a vehicle to the dealer, and then dealers sell those vehicles to the customer, there is a need to collect TCS.
In some more cases, do not have to pay TCS with some certain expectations, and such cases like- sale of a government department, public sector undertaking, clubs, sale of the vehicle. when a retail buyer purchases car for his personal use at that time there does not need to pay the TCS. however, for the purchase of goods or services exceeding Rs. 2 lakh in case this exclusion would not apply. In a motor vehicle include all types of vehicle like two-wheelers, motor car, truck busses.
The sale which is second hand also subject to TCS, if this sale value exceeds Rs. 10 lakh

Frequently Asked Question 

Que: If the amount of consideration received through a bank or other than cash mode, whether TCS provision is applicable?

Ans: Yes, the provision is applicable as per section 206C of income tax act cover every mode of receipt.

Que: If the amount of vehicle sold is 10 lakh whether TCS provision is applicable?

Ans: No, The provision is not applicable because the act uses the word exceeding 10lakh however not include 10 lakh

Que: The TCS provision on sale or motor vehicle is receipt basis or Invoice basis?

Ans: As per the provision of the Income-tax Act the amount shall collect on the sale of Motor vehicle only at the time of receipt of consideration. Earlier law was a tax to be collected at source on date of receipt of payment or Invoice, Now amended.

Que: Which types of Vehicle Cover under this?

Ans: As per the provision of finance bill 2016 TCS is applicable to all types of motor vehicles including trucks, buses, two-wheelers, and cars sold by manufacturers, exports, dealers, and government.

Que: Whether Manufacturers will also collect the TCS?

Ans: Yes, manufacture will also collect TCS from Dealers. It covers everyone including manufacturer, seller Interstate dealer sale.


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