Tax collection at source which is also known as TCS under Income tax means where a person/ supplier has to collect tax from the payer/ customer and he has to deposit the same with Government.
Under Income tax act there is only one section which covers all the transactions on which TCS needs to be collected i.e. section 206C. Details of all transactions covered under TCS has been summarized as under (TCS rate chart):
|Sl. No.||Nature of goods [Section 206C(1)]||Percentage
|(i)||Alcoholic Liquor for human consumption||1%|
|(iii)||Timber obtained under a forest lease||2.5%|
|(iv)||Timber obtained by any mode other than under a forest lease||2.5%|
|(v)||Any other forest produce not being timber or tendu leaves||2.5%|
|(vii)||Minerals, being coal or lignite or iron ore||1%|
|Sl. No.||Nature of contract or licence or lease, etc. [Section 206C(1C)]||Percentage|
|(iii)||Mining and quarrying||2%|
|Sec. 206C(1F)||Consideration for sale of motor vehicle of value exceeding Rs. 10 lakh||1%|
|(i)||Remitting of money outside India under Liberalised Remittance scheme through authorised dealer above Rs. 7 lakh||5%|
|(ii)||Purchase of package for overseas tour from seller of overseas tour programme||5%|
|Section 206C(1H)||Amount received by seller against sale of Goods on value exceeding Rs. 50 lakh from one buyer other than goods covered under sub-section (1), (1F), (1G)||0.1%|
In relation to sub-section (1) there is one exception which is as under:
“Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.” (See rule 37C and Form No. 27C)
It is important to note here that unlike TDS, there is no threshold limit in majority cases covered under TCS, hence TCS needs to be deducted on even Rs. 1 sale if the transaction is covered above.
If the transaction get’s covered under both TDS as well as TCS, do check relevant sections for any relaxation and in normal scenario TDS shall always overrule TCS.
As compared to TDS, there is no threshold limit for individual and HUF to collect TCS and hence all individual and HUF have to collect TCS from the beginning except a few sections.
Due date for payment of TCS for non-government Collectors – 7th of next month in which TCS has been collected.
The Due dates chart in relation to filing of TCS return are as under:
|Quarter||Period||Last Date of Filing|
|1st Quarter||1st April to 30th June||15th July|
|2nd Quarter||1st July to 30th September||15th October|
|3rd Quarter||1st October to 31st December||15th Jan|
|4th Quarter||1st January to 31st March||15th May|
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