What is the TCS tax?

Asked by: Joanie Morar MD  |  Last update: February 27, 2023
Score: 4.9/5 (73 votes)

Tax Collected at Source (TCS) is a tax payable by a seller which he collects from the buyer at the time of sale of goods. Section 206 of the Income Tax Act mentions the list of goods on which the seller should collect tax from buyers.

What is TCS tax with example?

Tax Collected at Source or TCS -Example

If a buyer is purchasing a car that costs Rs 10.01 lakhs then an amount of Rs 10,010 would be payable as TCS. This amount would need to be submitted to a particular branch of the bank which has been given permission by the government for receiving such payments.

What is TCS tax and how it is calculated?

TCS to be calculated on sales return (sales return order or sales credit memo) For example, sales return from customer for INR 10,000 on which 1% TCS is applicable for Nature of collection “Scrap”. In this case TCS calculation will be as following: Component.

What is TCS tax limit?

Where total turnover is more than Rs. 10 crores in the previous financial year and receives sale consideration of any products of more than Rs. 50 lakhs, such seller must collect TCS upon receiving consideration from the buyer on such amount over and above Rs. 50 lakhs, , as per Section 206C(IH).

What is TCS and why it is deducted?

TCS is the tax which is collected by sellers while selling something to buyers. TDS deduction is applicable on payments such as salaries, rent, professional fee, brokerage, commission, etc. TCS deduction is applicable on sales of goods like timber, scrap, mineral wood, and so on.

TDS vs TCS | Simplest Explanation With Example | Income Tax

39 related questions found

Can we claim TCS refund?

Yes, TCS can be claimed as refund in bank account. In this scenario, in most of the cases, GST liability will always be lower than ITC because the GST on Commission / courier charges of Flipkart, Amazon etc. will be 18%, apart from ITC on purchases, expenses etc.

Who will deduct TCS?

Tax Collected at Source (TCS) is tax that is payable by the seller, but which is collected from the buyer. Section 206C of the Income Tax Act has an exhaustive list of goods that are specified for this purpose.

What is TCS tax refund?

If your client's refund is less than expected and you see a coinciding TCS TREAS 449 offset, this means that the tax payers refund has been reduced to repay a debt collected through the Treasury Offset Program. This program is designed to collect delinquent debts that are owed to states and federal agencies.

What is difference between TCS & TDS?

TCS refers to 'tax collection at source' while TDS stands for 'tax deduction at source. ' While these are not taxes, they are an obligation that is deducted at the time of payment, or received more and deposited to the Income Tax Department.

Is TCS collected on GST?

Answer to 1st question is very clear as CBIC itself had issued a circular in Dec 2018, which was later corrected in March 2019 through corrigendum, and in this circular CBIC has said that TCS is an interim levy not in nature of tax, thus TCS will not be included for valuation purpose under GST.

What is TCS percentage?

The rate is notified by the CBIC in Notification no. 52/2018 under CGST Act and 02/2018 under IGST Act. This means for an intra-state supply TCS at 1% will be collected, i.e 0.5 % under CGST and 0.5% under SGST. Similarly, for a transaction between the states, the TCS rate will be 1%, i.e under the IGST Act.

How do I claim TCS in GST?

Steps to file 'TDS and TCS credit received' on GST portal
  1. Step 1: Login toGST portal.
  2. Step 2: Go to 'Services' > 'Returns' > 'Returns Dashboard'
  3. Step 3: Select the return period of GSTR-3B being filed and proceed to 'TDS/TCS credit received' tile.

What is GST TDS & TCS?

TDS and TCS under GST is an acronym for tax deduction at source and tax collection at source. These terms are even present under the Income Tax law. TDS and TCS under GST came into effect from 1st October 2018.

Why did I get a deposit from TCS Treasury?

This program is designed to collect delinquent debts that are owed to states and federal agencies." You, or your spouse have past due debts and your refund has been used either from the IRS and/or your state and applied to that debt.

What does TCS stand for?

What is the Traction Control System(TCS) in a car, and what does the TCS light mean? “The traction control system detects if any of the wheels are losing their grip on the road. Once located, it automatically corrects the problem to ensure the car's stability.”

What happens if TCS is not collected?

b) Levy of Penalty: If any person fails to collect the whole or any part of the tax, then such person shall be liable to pay by way of penalty under Section 271CA, a sum equal to the amount of tax which such person failed to collect.

What is new rule of TCS?

The new rules cover those whose aggregate tax deducted at source (TDS) or tax collected at source (TCS) during a fiscal year is Rs 25,000 or more. In the case of senior citizens, the aggregate of Rs 50,000 will apply.

How is TDS and TCS calculated?

The tax deduction rate (TDS) for the purchase of goods is 0.1% of the sum exceeding Rs. 50 lakhs. The tax collection rate (TCS) for the sale of goods is 0.1% of the sale sum exceeding Rs. 50 lakhs.

What is TCS in banking?

Tax Collected at Source (TCS) | RBL Bank. Recurring Merchant Payments.

What is TCS off mean?

If the “Traction Control System (TCS) off” Warning Indicator Light is on in the dashboard, this is an indication that the traction control system (TCS) has been disengaged.

Can we claim TCS on car purchase?

Yes, TCS is to be collected, as the seller create a single invoice, it can be for two different parts of motor vehicle. So even though the individual value do not exceed Rs. Ten Lakhs, but if the invoice amount exceeds Rs. 10,00,000, then TCS is to be collected from customers.

Is TCS applicable if TDS is deducted?

As per this clause TCS is not required to be collected if buyer is liable to deduct TDS and deducted TDS. After going through both the provisions it is abundantly clear that TDS is primary and TCS is secondary.

Why did I get an unexpected tax refund?

Another reason why you may get an unexpected tax refund is if you forgot to include tax that you had already paid, which is often the case with independent contractors and self-employed people.

How much was the stimulus check in 2021?

COVID-19 Stimulus Checks for Individuals

The IRS issued three Economic Impact Payments during the coronavirus pandemic for people who were eligible: $1,200 in April 2020. $600 in December 2020/January 2021. $1,400 in March 2021.