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Extra Tax On Jewellery Cash Sales Over Rs.2 Lakh Coming

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.

 

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