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HomeNewsTax deduction (TCS) threshold for cash purchase of gold jewellery rolled back

Tax deduction (TCS) threshold for cash purchase of gold jewellery rolled back

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The government has rolled back its budget decision to apply 1% tax collection at source on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh with effect from June 1.

Earlier, the threshold for tax collection at source (TCS) was applicable for cash jewellery purchase of above Rs 5 lakh. In the Budget, the government proposed to reduce the threshold to Rs 2 lakh. As a result, 1% TCS was applicable for cash jewellery purchase of above Rs 2 lakh.

Jewellers went on 42-day strike opposing the change and it impacted the jewellery sale as well. Jewellers said that the Rs 2 lakh was a very small sum for wedding jewellery.

So now, the government has rolled back its decision and Tax collection at source is only applicable for

  • cash purchase of jewellery of Rs 5 lakh and above (rolled back from Rs 2 lakh threshold)
  • cash purchase of bullion for Rs 2 lakh and above (no change)

TCS is introduced as a measure to curb tax evasion and check black money transactions. Iis collected by the seller from the buyer at the time of sale and is deposited with the government. The person from whom the TCS is collected gets credit for the same amount in his income tax return.

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