{"id":26482,"date":"2019-11-08T12:56:21","date_gmt":"2019-11-08T07:26:21","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=26482"},"modified":"2023-05-25T14:30:19","modified_gmt":"2023-05-25T09:00:19","slug":"tcs-a-tax-collected-at-source-and-its-rates","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/tcs-a-tax-collected-at-source-and-its-rates\/","title":{"rendered":"TCS – A Tax collected at source and its Rates"},"content":{"rendered":"

TCS stands for Tax Collected at Source<\/strong> 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<\/strong>[1]<\/a><\/sup>, 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.<\/p>\n\n\n\n

Categorization of Seller and Buyer for Tax\nCollected at Source<\/strong><\/h2>\n\n\n\n

For tax collected\nat source, there are some specific people and organizations that have been\nclassified as sellers. The below-mentioned person is treated as SELLER<\/strong>\nwho can collect tax at source from the buyers along with the list of the BUYER<\/strong>.<\/p>\n\n\n\n

Category of Seller<\/h2>
\n\n\n\n

<\/p>

  • Central Government<\/li>\n

    <\/p>

  • State Government<\/li>\n

    <\/p>

  • Local Authority<\/li>\n

    <\/p>

  • Statutory Corporation or Authority<\/li>\n

    <\/p>

  • Company registered under the Companies Act<\/li>\n

    <\/p>

  • Partnership firms<\/li>\n

    <\/p>

  • Co-operative Society<\/li>\n

    <\/p>

  • Any person or HUF who is subjected to an audit of accounts under Income tax act for a particular financial year.<\/li><\/div>\n\n\n\n

    Category of Buyer<\/h2>
    \n\n\n\n

    \n<\/p>

    1. Public sector companies<\/strong><\/p>\n\n\n\n

    2. Central Government<\/strong><\/p>\n\n\n\n

    3. State Government<\/strong><\/p>\n\n\n\n

    4. Embassy of High Commission<\/strong><\/p>\n\n\n\n

    5. Consulate and other Trade Representation of a Foreign Nation<\/strong><\/p>\n\n\n\n

    6. Clubs such as sports clubs and social clubs<\/strong><\/p>\n\n\n

    <\/p>\n

    <\/p>\n

    Goods covered under and Applicability of Tax rates<\/strong><\/h2>\n

    <\/p>\n

    <\/p>\n

    When the buyers and sellers deal in the
    goods utilized for trading, TCS is payable and the tax payable is collected by
    the seller at the point of sale.<\/p>\n

    <\/p>\n

    <\/p>\n

    Note -Tax Exemptions<\/strong><\/p>\n

    <\/p>\n

    <\/p>\n