The Finance Bill 2017, recently introduced in the Indian Parliament has lowered the threshold level for the cash purchase of jewellery from Rs. 5,00,000 to Rs. 2,00,000. Once passed, a 1% Tax Collected at Source (TCS) will be applicable on all cash purchases of jewellery above Rs. 2,00,000. This is expected to become effective from April 1, 2017.
Currently, TCS of 1% is being charged on cash purchases of jewellery over Rs. 5,00,000 and bullion of over Rs. 2,00,000.
The Finance Bill has now removed jewellery from its separate category and clubbed it with all other goods in a general category which attract a 1% TCS on cash transactions above Rs. 2,00,000.
This step is part of the Government of India’s (GoI) move to do away with all cash purchases above Rs. 3,00,000, media reports indicate. The GoI also plans to make any transactions violating this norm punishable; with the recipient of the cash amount liable to pay a fine of an amount equivalent to the disallowed cash received.
News Source : gjepcorg