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TCS stands for Tax Collected at Source and, it is the tax payable by a seller which the seller collects from the buyer at the time of sale. Section 206C of the Income-tax Act 1961[1], governs the goods fall under Tax Collected at Source, where the seller has to collect tax from the purchases. Income Tax Act has provisions for the tax collected at source and under these provisions; specified persons are required to collect a specified percentage of tax from their buyers. TCS is collected on exceptional transactions i.e. trading or business.
For tax collected at source, there are some specific people and organizations that have been classified as sellers. The below-mentioned person is treated as SELLER who can collect tax at source from the buyers along with the list of the BUYER.
1. Public sector companies
2. Central Government
3. State Government
4. Embassy of High Commission
5. Consulate and other Trade Representation of a Foreign Nation
6. Clubs such as sports clubs and social clubs
When the buyers and sellers deal in thegoods utilized for trading, TCS is payable and the tax payable is collected bythe seller at the point of sale.
Note -Tax Exemptions
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The due date for filing the return andmaking the payment is as follows-
Note
The seller deposits the TCS amount within 7 days in Challan281 from the last day of the month in which the tax was collected and If inany case, the tax collector does not collect the tax or after collectingdoesn’t pay it to the government as per above due dates, then he will be liableto pay interest of 1% per month or a part of the month.
Tax Collector is the person responsible forcollecting the tax and depositing the same to the government
A quarterly TCS return i.e. Form 27EQis required to be submitted by every tax collector in respect of the tax collected by him in a particular quarter.
The interest on delay inpayment of TCS to the government should be paid before filing of the return.
A certificate isissued for TCS return filed in Form 27D, as when the tax collector fileshis quarterly TCS return i.e. Form 27EQ, he has to provide a TCScertificate to the buyer of the goods. The TCS certificate contains thefollowing details of the seller and the buyer both i.e.
Time Duration forissuance of TCS certificate
The TCScertificate is required to be issued within 15 days from the date of filing thequarterly return i.e.
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