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TDS

Nagesh Midde (student) (191 Points)

11 February 2008

Whats the difference between TDS & TCS

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5 Replies

CA Hemant T Dewani (Chartered Accountant) (3356 Points)
Replied 11 February 2008

when some one give you service and if it is applicable to income tax act the you will liable to deduct tds tcs is liable when you sales some goods to others then you will deduct tcs from sales amounts

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O.D.SHARMA (DGM-F & A) (1734 Points)
Replied 11 February 2008

TDS is on contract of service provider and TCS is on sale of scrap etc of unit.

(Guest)

Let us say you have to give some amount (say Rs.1 Lakh) to Mr.X. If TDS rules apply to the transaction, you can not pay the amount fully to Mr.X. You have to deduct some amount (say Rs.10,000/-) as tax from such paymnet and you can pay only the balance (say Rs.90,000/-). Since you are deducting the tax from amount payable it is named as Tax Dedcuted at Source (TDS). On the other hand let us say Mr.Y has to pay you some amount (Say Rs.1 Lakh). If TCS rules apply to the transaction, you can not receive only that amount from Mr.Y. You have to receive some more amount (say Rs.10,000/-) as tax alongwith such paymnet and you can receive both the amount (say Rs.1.10,000/-). Since you are receiving the tax alongwith the amount receivable it is named as Tax Collected at Source (TCS).

Srinivas Sharma KN (Tax Consultant) (292 Points)
Replied 11 February 2008

The main difference Deduction and Collection. In case of TDS, tax is to be deducted from the amount payable. In case of TCS, tax is to be collected along with the amount receivable (ex. on sale value of scrap).

ANIL K SRIVASTAVA (C A) (47 Points)
Replied 12 February 2008

TDS & TCS are the means to collect tax on income. Tax is deducted at source (TDS) out of payments made e.g. Salary, Interest, Rent, Commission etc. On the other hand Tax is collected at Source (TCS) along with sale of specified goods like Timber, Forest Produce, Liquor, Scrap etc.