Tax Collected at Source

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Tax Collected at Source (TCS) is income tax collected by seller in India from payer on sale of certain items. It is provided in section 206C of Income Tax Act 1961. The seller has to collect tax at specified rates from the payer who has purchased these items :

  • Alcoholic liquor for human consumption
  • Tendu leaves
  • Timber obtained under a forest lease
  • Timber obtained by any mode other than under a forest lease
  • Any other forest produce not being timber or tendu leaves
  • Scrap
  • Minerals being coal or lignite or iron ore
  • Scrap Batteries

Example:- Sale of scrap by X to Y for Rs 500000 X is a seller, Y is Purchaser Y Pay amt of 500000 for scrap + VAT + TCS@1% Calculation Sale Amt 500000 VAT Amt@5% 25000 TCS Amt@1% 5000

Total Amt 530000

It is the amount paid by buyer and buyer will get the TCS Paid Certificate from seller. Buyer take the credit of TCS at the time of filling of return of their income. Seller has to pay the amt to govt with the due date and file return of the TCS paid quarterly.