Tax Collected at Source

TCS is governed by the Income Tax Department India under the Income Tax Act. It applies to specific transactions like sale of goods, foreign remittances, and certain services.

The seller collects TCS from the buyer and deposits it with the government. The buyer can later claim credit of TCS while filing income tax returns.

Common Transactions Covered Under TCS

• Sale of goods above specified limits
• Foreign remittance (LRS)
• Sale of scrap, minerals, etc.

TCS vs TDS

• TCS: Collected by seller from buyer
• TDS: Deducted by payer before making payment

Why TCS Matters

• Helps track high-value transactions
• Ensures tax compliance
• Reduces tax evasion

Key Points

• Applicable rates vary by transaction type
• Reflected in Form 26AS
• Adjustable against total tax liability

"If a seller collects ₹1,000 as TCS on a transaction, the buyer can claim this amount as tax credit while filing returns."