Tax Collected at Source ( TCS ) – Income Tax Act Indian has provisions for the collection of taxes to the head. In these provisions, some people must collect a specified tax percentage of their buyers on extraordinary transactions. Most of these transactions are commercial or commercial. It does not affect the common person. In this article, we will take care of:

Tax Levied To The Source (TCS)

A seller who collects from the buyer at the time of sale payts the tax levied to the source (TCS) . Article 206C of the income tax governs the products on which the seller must collect taxes for buyers.

Goods Subject To The Provisions And Rates Applicable To TCS

The interests below are for manufacturing, processing or production, taxes are not due. If the same goods are used for trading purposes, the tax is due. The seller collects the tax due at the point of sale. The TCS rate is different for the property specified in various categories.

Type of Goods Rate
Liquor of alcoholic nature, made for consumption by humans 1%
Timber wood under a forest leased 2.50%
Tendu leaves 5%
Timber wood by any other mode than forest leased 2.50%
A forest produce other than Tendu leaves and timber 2.50%
Scrap 1%
Minerals like lignite, coal and iron ore 1%
Bullion that exceeds over Rs. 2 lakhs/ Jewellery that exceeds over Rs. 5 lakhs 1%
Purchase of Motor vehicle exceeding Rs. 10 Lakhs 1%
Parking lot, Toll Plaza and Mining and Quarrying 2%

Classification of Sellers and Buyers for TCS

There are some specific people or organizations that are considered as sales of taxes perceived at the source. No other merchandise seller can collect taxes at the source of buyers outside the following list:

  • Central government
  • Government government
  • Local authorities
  • Authorities Corporation or Regulatory
  • Company registered under the Companies Act
  • Partnership companies
  • Cooperative Society

The Income Tax Act has audited any person or HUF for a particular exercise.

A buyer is a person who obtains property of the specified nature in any sale or right to receive such property through auction, race or another mode. However, these buyers are free from the perception of taxes at the source.

  • Public sector companies
  • Central government
  • Government government
  • Embassy of the High Commission
  • Consulate and other commercial representations of a foreign nation
  • Clubs like social clubs and sports clubs.
  • TCS and payments made

All amounts collected by a government office should be filed on the same day of collection.
The seller’s deposits the amount of the TCS in Challan 281 within 7 days from the last day of the month in which the tax was collected.

If the preceptor in charge of the perception of rights and the deposit is the same as the government does not charge at the expense or after the harvest does not pay the government of previous dates, it will be liable to pay interest of 1% per month or part of the month.

Each tax collection must present a quarterly TCS, I.E. 27EQ yield in the form of collecting costs for it in a particular area. You must pay Interest on the late payment of the TCS to the government before the return of the deposit.

Certificate of Tax Collected at Source (TCS)

When a tax collector files his quarterly TCS return i.e  Form 27EQ, he has to provide a TCS certificate to the purchaser of the goods. 2. Form 27D is the certificate issued for TCS returns filed. This certificate contains the following details:

  • Name of the Seller and Buyer
  • TAN of the seller i.e who is filing the TCS return quarterly
  • PAN of both seller and buyer
  • Total tax collected by the seller
  • Date of collection
  • The rate of Tax applied

This certificate has to be issued within 15 days from the date of filing TCS quarterly returns. The due dates are:

Quarter Ending Date for generating Form 27D
For the quarter ending on 30th June 30th July
For the quarter ending on 30th September 30th October
For the quarter ending on 31st December 30th January
For the quarter ending on 31st March 30th May

If you are still not clear about filing TCS returns, please consult the tax experts at ClearTax.

Tax Collected at Source (TCS) Exemptions

The perception of taxes at the source is exempt in the following cases:

When eligible products are just for personal consumption

The buyer buys products for production, processing or production and not for trade in these products.

Tax Collected at Source (TCS) Under The GST

Tax Collected at Source (TCS)

Each dealer or dealer who sells products online would obtain the payment of the online platform after deduction from a tax amount @ 1% below the IgST law. (0.5% in CGST and 0.5% in SGST)

All retailers/merchants requires to register under the Mandatory GST.

Presentation of the 24G form

In the case of a government office, where the tax was paid to the Central Government’s credit, without the production of a Challan associated with the filing of the charge in a bank, following the changes to the rules, must be submitted Form 24G:

Rules where TDS without Challan (installs amendments to Article 30)

If TDS has not been tabled Challan, the person reported to the TDS depot within the government – a person must file a declaration in the form of 24G, the body authorized by the Senior Director of Income Tax (Systems). [Rule 30 (4)]
This form must be submitted 24G released within 15 days after the end of the reference month. For March, the form must be submitted no later than 30th April 2019

24G form must be presented (a) electronically with digital signature (b) electronically occurs at the same time in the form of 27a (c) or controlled by an electronic procedure as prescribed

A person referred to in paragraph 1 shall inform the book identification number generated for each of the deductors for which the deducted sum was filed.

The Chief Executive Officer of Income (Systems) must specify the procedure for furniture and verification of the Form Declaration 24G.:

Rules in which TDS is deposited without Challan (changes made to Article 30)

Rules where TCS under Article 206C is deposited without Challan (amendments to article 37CA)
Suppose TCS was deposited without Challan, the person to whom the collector reported TCS for the deposit to the government. Such a person will present the 24G module the agency authorized by the Senior Director of Income Tax (Systems).

You must present this form of 24g within 15 days from the end of the month in question.
If the 24G module concerns the month of March, you must present it no later than 30th April. The 24G module is must.

  • Electronic under the digital signature
  • Electronically with verification in form 27a or
  • Verified by an electronic procedure as prescribed

A person mentioned in the Bullet 1 informs the identification number of the book generated to each deactivating for which the amount deducted has been filed.

The Director-General on Income (Systems) must specify the furnishing and verification procedure for the form of declaration 24G.

Also Read: NEFT – Process, Benefits, How To Transfer Funds By NEFT?