Set up tax collected at source (TCS) for Section 206C(1H)
Business Central supports the configuration of Tax Collected at Source (TCS) on receipt of payment in the India localization.
Section 206C(1H) was introduced in the Finance Bill, 2020. The historical scenario described here concerns a seller collecting TCS from a buyer on receipts for sales of goods. It uses a threshold of INR 50,00,000 in a financial year and a seller turnover criterion of INR 10,00,00,000 in the previous financial year. TCS is calculated on the amount above the threshold, with different configured rates for PAN and non-PAN customers. These historical assumptions explain the feature, not the current legal applicability of the section. Configure the rates and thresholds that apply to your transactions.
Set up TCS section 206C(1H)
The following setups are required:
Set up TCS nature of collection
TCS nature of collection identifies the type of receipt for TCS calculation. Use TCS On Recpt. Of Pmt. to configure calculation on receipt of payment.
- [!INCLUDE [open-search](../../includes/open-search.md)] Enter TCS Nature of Collections, and then choose the related link.
Fill in the fields as described in the following table.
Field Description TCS On Recpt. Of Pmt. Select to calculate TCS on receipt of payment. A nature of collection with this option selected can't be used on sales document lines or journal lines with a document type other than Payment.
Set up TCS rates
The rate of TCS is defined by the combination of TCS nature of collection and assessee code. Configure Calc. Over & Above Threshold on the applicable tax rate.
- [!INCLUDE [open-search](../../includes/open-search.md)] Enter TCS Rates, and then choose the related link.
Fill in the fields as described in the following table.
Field Description Calc. Over & Above Threshold Select to calculate TCS only on the amount above the configured threshold. If cleared, the normal threshold calculation applies, without excluding the threshold amount from the taxable base. If Threshold Overlook is selected on the customer's Allowed NOC line, the threshold is ignored. This option isn't restricted to section 206C(1H).