Diff. between tds n tcs.

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This query is : Resolved

pooja sharma (Querist)

28 August 2012 dear sir/ madam

pls. tell me that what is the difference between tds and tcs? n what the processior followed for caculating tcs. ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

28 August 2012 1. TDS is deducted by the person making the payment. He makes the payment AFTER deducting TDS.

2. TCS is collected by the seller (recipient of money) in addition to the sales proceeds.

Sale Price
Add: CST/Vat
Total

TCS will be calculated on this total amount.

Amount to be recovered from buyer will be 'Total' + TCS.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

28 August 2012 TDS- Tax Deducted at source Generally Deducted by the person who is making payment against the expenses ( for services received )Like--

Income from Salary U/s 192
Interest other than interest on securities u/s 194A
Payment to Contractors; Sub-contractor; Advertising Contractors U/s 194C
Rent U/s 194I
Commission or Brokerage U/s 194H
Fees for Professional / Technical Services U/s 194J.
Etc.

TCS- Tax collected at source When the seller of the following goods as specified U/s.206(1)

1.Alcoholic Liquor for Human consumption
2.Tendu Leaves
3.Timber Obtained under a forest lease
4.scarp
5.Parking lot,toll plaza,mining and quarrying

while selling the seller collecting from the buyer of the particular product.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

28 August 2012 Difference between TDS and TCS

TDS and TCS are two exactly opposite scenarios.

The former is the deduction from the income of the recipient while the later is the amount accumulated by the company or others in the form of tax. So in other words TDS is a form of expense while TCS is a form of income.

In India the tax is deducted at source (TDS) on the following grounds:

* Salaries
* Rent received from properties
* Payment received on Commission or brokerage
* Interest received on bonds and securities.
* Interest received from fixed deposit.
* Other sources of income are also included in it as in payment received from other professional services apart from salary.

On the other hand it is the responsibility of the seller or the company to deposit the Tax Collected at Source.

Under Section 206C, every item that a seller sells is liable for some percentage of tax. For example even if a seller sells a scrap it is entitled for a tax of 1% on the selling price.

Following are the goods when sold in the market must be subjected to TCS and these collected taxes must be deposited in the Income Tax departments at the end of the financial year:

1.Alcoholic Liquor for Human consumption
2.Tendu Leaves
3.Timber Obtained under a forest lease
4.scarp
5.Parkinglot,toll plaza,mining and quarrying

For more details check out the article from below link--

https://www.caclubindia.com/articles/all-you-want-to-know-about-tds-7882.asp

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