NEW DELHI: Government is trying to establish connection tax levied at source This applies to payments made by individuals where taxes are deducted from their sources of income, according to a senior official. This is to help ensure that individual taxpayers’ cash flows are not impacted.
The move also comes at a time when the government plans to introduce a 20 percent tax at source (TCS) charge for certain companies international editions from July 1st.
In general, TCS is the tax that a seller collects at the point of sale of goods or services Tax deducted at source (TDS) is the amount collected as a tax by the government.
The government has exempted transactions up to Rs 7 lakh from the TCS to ease the burden on small taxpayers. Therefore, the majority of transactions made by most transactions are not covered by 20 percent TCS, Chief Economic Advisor (CEA) V Anantha Nageswaran has said.
Defending the decision, he said: “And they (the government) are also trying to link the TCS to your TDS, so TCS payments you make have to reflect a lower TDS. So it’s just a matter of making sure you’re not affected from a cash flow perspective.”
It will also bring tremendous relief to people concerned about the annoyance or irritation of seeing this TCS separate from TDS, he said at industry association CII’s event on Thursday.
The 20 percent TCS levy on international credit card spending is scheduled to come into effect on July 1.
Amid the backlash, the Treasury exempted spending up to 7 lakh rupees from the TCS scope last week.
“The exemption has been implemented … The passing of TCS into the TDS deduction will also ensure that ordinary taxpayers do not feel the impact for them,” he said.
Additionally, the CEA said one stance was that “you only had to collect 1 percent or 5 percent to track it.”
But there are people who like to stay away from taxes by paying as little as 1 percent or 5 percent. So there must also be a deterrent effect, he stressed.
In his opinion, the government has data indicating that not only has this mechanism been abused by a small group of people, but that the volumes involved are quite large.
Medical treatment and education expenses abroad are currently exempt from TCS up to 7 lakh rupees per year. A levy of 5 per cent is levied on expenses exceeding 7 lakh rupees.
For those who have taken out student loans, the TCS rate is 0.5 percent.
The move also comes at a time when the government plans to introduce a 20 percent tax at source (TCS) charge for certain companies international editions from July 1st.
In general, TCS is the tax that a seller collects at the point of sale of goods or services Tax deducted at source (TDS) is the amount collected as a tax by the government.
The government has exempted transactions up to Rs 7 lakh from the TCS to ease the burden on small taxpayers. Therefore, the majority of transactions made by most transactions are not covered by 20 percent TCS, Chief Economic Advisor (CEA) V Anantha Nageswaran has said.
Defending the decision, he said: “And they (the government) are also trying to link the TCS to your TDS, so TCS payments you make have to reflect a lower TDS. So it’s just a matter of making sure you’re not affected from a cash flow perspective.”
It will also bring tremendous relief to people concerned about the annoyance or irritation of seeing this TCS separate from TDS, he said at industry association CII’s event on Thursday.
The 20 percent TCS levy on international credit card spending is scheduled to come into effect on July 1.
Amid the backlash, the Treasury exempted spending up to 7 lakh rupees from the TCS scope last week.
“The exemption has been implemented … The passing of TCS into the TDS deduction will also ensure that ordinary taxpayers do not feel the impact for them,” he said.
Additionally, the CEA said one stance was that “you only had to collect 1 percent or 5 percent to track it.”
But there are people who like to stay away from taxes by paying as little as 1 percent or 5 percent. So there must also be a deterrent effect, he stressed.
In his opinion, the government has data indicating that not only has this mechanism been abused by a small group of people, but that the volumes involved are quite large.
Medical treatment and education expenses abroad are currently exempt from TCS up to 7 lakh rupees per year. A levy of 5 per cent is levied on expenses exceeding 7 lakh rupees.
For those who have taken out student loans, the TCS rate is 0.5 percent.
