May 2026 Tax Compliance Guide - Gems & Jewellery

Important May 2026 Income Tax Compliances

Strategic Guide for Gems & Jewellery Businesses in India

Gems and jewellery businesses in India face unique income tax responsibilities because they handle high-value cash transactions, bullion trading, and major raw material procurement. In May 2026, managing these rules is more complicated than usual.

The Income-tax Act, 2025 came into effect on 1 April 2026. This means businesses must separate their activities:

  • FY 2025–26: Follows the old Income-tax Act, 1961.
  • FY 2026–27: Follows the new Income-tax Act, 2025.

Failing to meet these deadlines leads to heavy fines, interest charges, and strict penalties for misreporting income.

Key May 2026 Compliance Calendar

Jewelry businesses must track these important deadlines for both financial years:

Due Date Compliance Requirement Governing Act
7 May 2026 Deposit TDS & TCS collected in April 2026. Submit buyer declarations to stop TCS on April purchases. Income-tax Act, 2025
15 May 2026 File the Quarterly TCS Statement (Form 27EQ) for January–March 2026. Income-tax Act, 1961
30 May 2026 Issue Quarterly TCS Certificates (Form 27D) to buyers for January–March 2026. Income-tax Act, 1961
31 May 2026 File Quarterly TDS Returns (Forms 24Q, 26Q, 27Q) for January–March 2026. Income-tax Act, 1961
31 May 2026 File the Statement of Financial Transactions (SFT in Form 61A) for high-value cash transactions. Income-tax Act, 1961

Critical High-Value Rules for Jewelers

1. Statement of Financial Transactions (Form 61A)

The Income Tax Department uses Form 61A to track high-value physical asset sales.

The Rule: Jewelers must report any customer who pays more than ₹2,000,000 in cash for jewelry or bullion in a single financial year.

Action Required: Audit your sales logs for FY 2025–26. Compile the PAN, [Aadhaar Redacted], and address details of these buyers. Submit Form 61A by 31 May 2026.

2. Dual-Act TDS/TCS Tracking

Since the new law started on 1 April 2026, your accounting software needs two distinct setups:

  • For Q4 (Jan–March 2026): Use old codes like Section 194C (contractors) or Section 206C (TCS).
  • For April 2026 Onward: Map payments to the new Section 393 table formats under the 2025 Act. Citing an old code for an April transaction will cause errors.

Step-by-Step Compliance Example

Scenario: Mehta Fine Jewellers (Mumbai)

Step 1 (By 7 May): Deposit tax deducted from April payments (e.g., artisan charges). Use new Section 393 layout.
Step 2 (By 15 May): File final TCS return for the previous quarter (Jan-Mar 2026).
Step 3 (By 31 May): Report March 28 supplier transactions on Q4 TDS return (Act of 1961).
Step 4 (By 31 May): File Form 61A for the ₹2,500,000 cash sale from March 12.

Frequently Asked Questions

Do we file May 2026 returns under the old 1961 Act or the new 2025 Act? It depends on transaction timing. Jan-March 2026 uses the 1961 Act; April 2026 onwards follows the 2025 Act.
What is the cash transaction reporting limit for jewelers in Form 61A? Any cash receipt for jewelry/bullion exceeding ₹2,000,000 from a single customer in a financial year.
What happens if I use an old TDS section code for an April 2026 payment? It will cause processing errors on the IT portal. You will need to file a correction statement later.
What are the penalties for missing the May tax deadlines? Late fee of ₹200 per day. Income misreporting penalties can reach 100% of the tax due under the 2026 budget rules.