WHAT IS TCS?
TCS is a tax collected at the source. It means tax collected at source (tax collected from income). TCS is paid by the seller, dealer, vendor, and shopkeeper. However, while selling any goods, he collects the same from the buyer or customer. After collecting it, it is the work of the seller or shopkeeper to deposit it. It is controlled under Section 206C of the Income Tax Act. Only sellers of certain types of items collect it. These items include timber wood, scrap, minerals, and tendu leaves. This type of tax is deducted only when the payment exceeds a limit.
WHAT PERCENTAGE DOES TCS DEDUCT?
TDS on insurance commission and brokerage came down from 5 percent to 3.75 percent. TDS on payment of dividends by mutual funds was reduced from 10 percent to 7.5 percent. TCS on motor vehicle sales above Rs 10 lakh came down from 1 percent to 0.75 percent.
What is TCS Tax?
TCS – Tax collected at source. Tax Collected at Source (TCS) is the tax that is payable by the seller but which is collected from the buyer. Section 206C of the Income Tax Act contains an exhaustive list of goods specified for this purpose.
Who is eligible for TCS Tax?
The new section 206 (1H) was introduced in October 2020 to collect TCS from buyers of goods who paid more than Rs 50 lakh towards sale consideration in the current financial year. TCS is to be collected only by entities having turnover of more than Rs 10 crore in the previous financial year.
What is TCS on sale of goods?
TCS calculation and effective dates
A seller is required to collect tax at source at 0.1% on receipt of consideration of value exceeding Rs. 50 lakh in a financial year from the buyer. (Due to COVID-19 this rate has come down to 0.075 % as of 31st March 2021).
When is TCS deducted?
Only sellers of certain types of items collect it. These items include timber wood, scrap, minerals, and tendu leaves. This type of tax is deducted only when the payment exceeds a limit.
When is TCS held?
TCS is paid by the seller, dealer, vendor, and shopkeeper. However, while selling any goods, he collects the same from the buyer or customer. After collecting it, it is the work of the seller or shopkeeper to deposit it. It is controlled under Section 206C of the Income Tax Act.