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Your Queries

As per the third proviso to Section 2(42A) newly inserted by Finance Act 2016, the shares of unlisted company shall be considered as short-term capital asset if they are held by the assessee for a period of not more than 24 months before the date of its transfer.

By: | Published: November 14, 2016 6:12 AM
Section 206C(1D) of the Income Tax Act clearly states that TCS is to be collected on cash sales only if consideration is in excess of R2 lakh in case of any services. (Reuters) Section 206C(1D) of the Income Tax Act clearly states that TCS is to be collected on cash sales only if consideration is in excess of R2 lakh in case of any services. (Reuters)

TCS on cash sales of above Rs 2 lakh

I am engaged in providing certain drilling equipment repairing services. Kindly guide me on the following two issues related to Tax Collection at Source (TCS). Is TCS applicable if the consideration received in cash is exactly Rs 2 lakh in respect of the services provided? Are PAN details are required to be quoted on all the documents for every transaction?
—Amardeep Singh

Section 206C(1D) of the Income Tax Act clearly states that TCS is to be collected on cash sales only if consideration is in excess of R2 lakh in case of any services. Therefore, TCS shall not be applicable in case the amount of cash sale is exactly R2 lakh. Regarding the second question, please note that as per the new requirement prescribed by CBDT (Notification No. 95/2015 dated 30-12-2015), PAN details are required to be quoted on all documents pertaining to the transaction of provision of services of any nature, where the transaction value exceeds Rs 2 lakh per transaction.

INCOME TAX

I sold a certain number of shares of an unlisted company in September 2016. These shares were purchased by me in March 2014. What is the tax implications if there is a gain arising on proposed transfer of the said shares?
—Prabav Kumar

As per the third proviso to Section 2(42A) newly inserted by Finance Act 2016, the shares of unlisted company shall be considered as short-term capital asset if they are held by the assessee for a period of not more than 24 months before the date of its transfer. Therefore in the instant case, since the shares of the unlisted company are held for a period of more than 24 months, the gain on sale of such shares shall be taxable as long term capital gains at the rate of 20% (with cost indexation benefit).

The writer is founder of RSM Astute Consulting Group

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