TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2011 Hello....

I have some confusion between the basic difference of TDS & TCS.....

How both of them are different from each other?????

CA Sanat Pyne

CA Sanat Pyne (Expert)
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03 January 2011 Tax deduction at Source (TDS)

Persons responsible for making payment of Income covered by the scheme of tax deduction is are required to deduct tax at source at the prescribed rates. Tax so deducted should be deposited within the prescribed time. Returns on TDS should be submitted within the specified time.

The income tax is deducted at source on

Salaries
Interest on Securities
Rent payments
Payments to Contractors and sub contractors
Payment of Commission or brokerage
Payment of fees for Professional/Technical Services
Payment of any income to Non Resident
Tax Collection at Source (TCS)

Tax Collection at Source arises on the part of the seller. The following goods when sold must be subjected to TCS and the taxes collected thereon must be remitted into department's accounts as done in the case of TDS

Alcoholic liquor for human consumption and 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 (waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons

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Querist : Anonymous

Querist : Anonymous (Querist)

04 January 2011 Thank You sir...

But can u tell me that which person get credit on such TCS either seller or buyer?????

As seller collect tax so may be buyer can get credit..... but kindly elaborate it sir....

Thnaks.........

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CA Sanat Pyne

CA Sanat Pyne (Expert)
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04 January 2011 Concept of TCS: - the seller of specified goods collect tax from the buyer under the section 206C (1). This is also called TCS and full form is Tax collected at source.

Definition of buyer: - Buyer is a person who buys the goods for sale. The mode of buying may be direct purchase, tender or any auction to the specified goods. But these are not covered as buyers in Tax Collected at source (TCS) Act.

- Central/State government.

- Public company.

- Embassy, High commission or representation of foreign country.

- Any club.

- Any person who buys the goods for personal consumption & not for sale.

Definition of seller: - seller of the specified goods is covered in TCS act. Seller may be

- individual or huf

- firm

- co-operative society

- company

- state or central government

- local authority

Specified goods: - Specified goods are those goods, sale or purchase of these goods attracts TCS. There are only some of goods which attract TCS and the list of these items is as follows.

1- Alcoholic liquor for human consumption.

2- Timber

3- Tendu leaves.

4- Forest produce other than timber and tendu leaves.

5- Scrap or waste.

- TCS Exemption:-

- The tcs will be zero or exempt when the buyer buys the goods for manufacturing or reproduction and not for sale.

- In this condition the buyer supplies Form 27C to the seller mentioning that he is the not a trader and will reprocess the goods which are purchased with duly stamped and signature.

- The seller needs to deliver copy of Form 27C to the commissioner of income tax.

TAN: - Every person who collects tax means the seller needs to apply for TAN no. and the TAN Number should be written to all challans, Forms & certificate of TDS/TCS.

This TAN number will combine work for TDS/TCS.

The seller need to deposit the tax amount within one week from the last day of the month in which the amount received of TCS with challan no. 281 also used for tds. The seller also need to issue a certificate to the buyer of TCS Form 27 D which can be issued monthly or six monthly basic.

Return: - the seller who collected TCS need to deposit return with Form 27EQ quarterly.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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04 January 2011 for tds tcs rate

download the file from
https://www.caclubindia.com/share_files/tds-tcs--an-overview-33121.asp

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