The sale and purchase of Gold will be closely monitored by the IT department.
Buying gold jewellery worth over Rs 2 lakh with cash will now attract one per cent tax collected at source (TCS) from April 1 to tackle the problem of black money.
In the Union Budget last year, the government had imposed TCS of one per cent for purchase of goods and services over Rs 2 lakh with cash from April 1, 2016. However, tax collected at source on gold jewellery was raised for cash payment to over Rs 5 lakh from June 1,2016.
The Finance Bill 2017 now seeks to do away with the threshold of Rs 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealings of over Rs 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash.
Under TCS, the seller will be required to collect an additional 1 per cent from the purchaser, and pay it to the government. This means that if you use cash to purchase gold worth over Rs 2 lakh, you will now have to pay extra money which can later on be claimed as a credit at the time of paying income-tax. For a consumer this only advances payment of income- tax.
