Tax deducted at source against local LC for person or firm

GO-005.2014.124

From 1 July 2014, for goods purchased through the issuance of LC or any financing agreement, the issuer bank needs to deduct tax at source during the payment of LC by the purchaser. If the LC is worth more than 5 lac, the bank will deduct tax at source from either the purchaser or the seller. This tax will be treated as AIT. Daily necessity items listed under rule 52U are exempted from this tax deduction.