When the Finance Bill 2017 is passed by the Indian Parliament, jewellery will be treated on par with general goods and any cash sales of jewellery exceeding ₹2 lakh in the country will attract a one percent ‘tax collected at source (TCS) as of April 1. Currently, cash sales of jewellery over ₹5 lakh are taxed.
As the government’s budget proposals already seek a ban on all cash transactions over ₹3 lakh, the new Bill seeks to do away with the ₹5 lakh threshold for jewellery. Cash dealings over ₹3 lakh will be punished with a penalty of an equivalent amount to be paid by the person receiving the cash.
A government official was quoted as saying, “The Income Tax Act provides for one per cent TCS on cash purchase of goods or services above ₹2 lakh. The definition of goods also includes jewellery.”
Gold bullion sales already attract a 1 percent TCS in the country.