The Narendra Modi-led NDA Government on Tuesday rolled back its Budgetary decision to impose 1 per cent tax collection at source (TCS) on cash purchase of gold jewellery worth Rs 2 lakh.
The threshold is now been raised to the earlier Rs 5 lakh with effect from June 1.
TCS of 1 per cent was imposed on cash purchase of jewellery worth Rs 5 lakh or more in 2012. Finance Minister Arun Jaitley, however, revised the amount from Rs 5 lakh to 2 lakh during the Budget announcement this year.
The decision will prove to be a big relief to jewellers who went on a 45-day long strike on March 1 after Finance Minister Arun Jaitley in his Budget speech in February proposed 1 per cent excise tax on non-silver jewellery. The strike had led to a massive pile up of stocks and jewellers have been struggling to clear these stocks.
TCS introduced as a measure to curb tax evasion and check black money transactions is collected by the seller from the buyer at the time of sale and is deposited with the Government.
The person from whom the TCS is collected gets credit for the same amount in his income tax return.