Tax Collected at Source (TCS) is an additional sum collected as tax from the buyer at the moment of sale by a seller of designated products. The TCS so collected is deposited by the seller to the government account. According to the Income Tax Act of 1961, certain sellers are required to collect a set proportion of tax when they receive payment from their buyers. The items on which the seller can collect tax from the buyers are governed by Section 206C of the Income-tax Act.
TCS is collected from goods that are of commercial or trading nature. Aside from the sale of commodities, anyone who enters into a lease, license, or contract for a parking lot, toll plaza, mining, or quarrying will receive a 2% commission from TCS.
Who can collect TCS?
Only specific individuals or organizations have been designated as sellers for Tax Collected at Source. No other vendor is permitted to collect tax from buyers at the point of sale. The following can collect TCS:
Goods on which TCS can be collected
A seller can collect TCS on the following goods:
TCS exemption
The following items are exempted from TCS:
TCS Return
Every tax collector is required to submit a quarterly TCS return for the tax collected during that quarter. TCS returns filed beyond the due date are subject to a Late Filing Fee of Rs.200/- per day for the time of delay from the due date.
TCS certificate
When a tax collector files his quarterly TCS return, he must furnish the buyers of the goods with a TCS certificate. The certificate should be issued within 15 days after the filing of the TCS quarterly returns. This certificate includes the following information:
Credence Corporate Solutions will gladly help you if you need help in filing TCS. Please call our office and we will be pleased to assist you.
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