TDS and TCS rates Tax Deducted at Source Tax Collected at Source :- Every individual has to pay TAX to government if his/her salary in the taxable range. Also as per income tax section 206C , Tax should be collected from assessee on sale of Specified Goods. Every individual being a seller should collect TCS (Tax Collected at Source ) from the Buyer of goods u/s 206C.
Tax is to be collected on sale of certain items like scrap etc. which involves trading activity and shall be payable to IT Department. It is direct tax which is deducted by payer out his payment made outside India & any employee, contractor, Sub contractor, etc Specific limit is mantioned for each.
Section 206C – The statute provides that the tax is to be collected by the seller of the commodities specified at the time of receipt of the sale proceeds either in cash or by cheque or draft or by any other mode or at the time of debit of such amount to the account of the buyer whichever is earlier.
The provisions of TCS apply to business of :
- Alcoholic liquor for human consumption
- 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.
TDS stands for Tax deducted at source and TCS stands for Tax collected at source.TDS is deducted on payment from the amount paid or credited in books which ever is earlier. Say you are making payment of RS. 100/- towards contractual services, you deduct TDS @ 2.266% = Rs. 2.67 and pay Rs. 97.33
TCS is collected in addition to the sales prices of certain specified items. For eg. on sale of scrap TCS to be collected is 1.133% Say for 100 Rs. sale of scrap you have to collect TCS @ 1.133% = 1.13 Rs. So. you must recieve Rs. 101.13. Both the collections are to be deposited with bank into respective accounts