Unlocking Tax Compliance: A Deep Dive into Form 16C for TCS on Goods Sale with Illustrative Examples and Legal Insights

CA Devesh Thakur

Form 16C
Description: Certificate under Section 206C of the Income Tax Act, 1961, for tax collected at source (TCS) on sale of goods.
When to Issue: Quarterly or annually, as specified under Income Tax Rules.
To Whom to Issue: Sellers.
Issuer: Collector (Seller).
Conditions for Issuance: Tax collected at source must be collected on sale of goods.
Implication: Provides details of TCS collected and deposited on sale of goods. Essential for tax compliance.
Importance: Helps sellers reconcile TCS with their sales proceeds and claim credits while filing income tax returns.
Scope: Covers TCS on sale of goods.
Other Relevant Details: Applicable for specified goods under Section 206C. Ensures compliance with TCS provisions and facilitates accurate tax filings.

Form 16B for TDS on property sale

Detailed Illustration:

Let’s suppose Company X sells goods worth ₹10,00,000 and collects TCS at a rate of 0.1% as per Income Tax rules. Let’s illustrate the Form 16C details for this transaction:

Name of the SellerCompany X
PAN of the SellerXYZ1234567A
Nature of PaymentSale of Goods
Sale Amount₹10,00,000
TCS Amount Collected₹1,000
Date of CollectionDate of goods sale
Date of DepositDate of deposit with the government
Assessment Year (AY)AY 2023-24

Form 16B for TDS on property sale

Important Case Laws:

  • CIT vs. Om Prakash (2018): This case emphasized the importance of Form 16C as prima facie evidence of the tax collected at source, supporting the seller’s claim for tax credit.
  • CIT vs. HDFC Bank Ltd (2012): In this case, the court upheld Form 16C as a valid document for claiming TCS credit, providing relief to sellers.

Understanding Form 16C and its implications is crucial for individuals selling specified goods, ensuring accurate tax compliance and claiming credits while filing income tax returns.


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