Briefly discuss the provisions of tax deduction/collection at source under the Income-tax Act, 1961 and determine the amount, if any, of TDS and TCS…

TDS implications (i) Since the sale consideration or stamp duty value of residential house exceeds 50lakhs, Mr. Deepak is required to deduct tax at source@1% of 65lakhs, being higher of sale consideration of 60lakh and stamp duty value of 65lakhs under section 194-IA. TDS provisions under section 194-IA are not attracted in respect of transfer of rural agricultural land, even if the consideration exceeds 50lakh. (ii) Every person, being a seller, who receives an amount as consideration for sale of a motor vehicle of the value exceeding 10lakhs, is required to collect tax at source @1% of the sale consideration from the buyer. TCS provisions will, however, not apply on sale of motor vehicles by manufacturers to dealers/distributors. Hence, XYZ Ltd., the manufacturer-seller need not collect tax at source on sale of cars to the dealer, ABC & Co., even if the value of each car exceeds 10lakhs. However, TCS provisions would be attracted when ABC & Co., sells cars to individual buyers, since the value of each car exceeds 10lakhs. ABC & Co. has to collect tax@1% of the consideration on sale of each car to an individual buyer.