If you have habit of making high value cash purchases (including jewellery/bullion) its time to shell out more money for your purchases.
As per the recent Finance Bill 2017 (which is yet to be passed by the Parliament), you may have to pay TCS (Tax Collected at Source) @ 1% on your Cash purchases exceeding Rs. 200000/-.
Currently, Section 206 C (1D) of the Income-tax Act, 1961 mandates sellers for TCS as follows :-
1) 1% TCS if the sale consideration is in cash for bullion purchases exceeding Rs. 2 Lakhs
2) 1% TCS if the sale consideration is in cash for Jewellery purchases exceeding Rs. 5 Lakhs.
3) 1% TCS if the sale consideration is in cash for any goods other than bullion & jewellery.
The proposed provision in the Finance Act, 2017 (Budget) the classification of “Cash purchases of Jewellery exceeding Rs. 5 Lakhs” is being removed and as a result, any goods purchases exceeding Rs. 2 Lakhs in cash will attract TCS @ 1%
The amendment , if approved by the Parliament will be effective from 1st April 2017.