TCS should be added in bill or should I issue debit note
This query is : Resolved
07 January 2021
I am issuing debit notes to my clients for TCS on sale of goods on the amt received during the month but one of them arguing for adding it to bill but he doesn't make payment timely.
What is the correct way to debit the party for TCS.
What is the correct way to debit the party for TCS.
07 January 2021
YOU SHOULD HAVE TO CHARGE IN THE INVOICE ITSELF.
07 January 2021
But TCS is calculated on amount received during the month.
26 July 2025
Good question! Here’s the deal:
* **TCS (Tax Collected at Source)** is *technically* collected on the amount **actually received** during the month, not just on the billed amount.
* So, you **can’t add TCS upfront in the original invoice** because you don’t know exactly how much the client will pay that month.
* The correct way, as per practice, is to issue a **separate debit note or TCS certificate** showing TCS on the amount received during that month.
* This way, you only charge TCS on actual collections, not on billed amount.
* Clients arguing for TCS to be added in the invoice itself is not fully aligned with how TCS works under law.
**Summary:**
* Original bill = without TCS
* TCS charged separately on collections → Debit Note or separate statement for TCS
This is also the common industry practice to avoid confusion.
If you want, I can help draft a sample debit note for TCS — would you like that?
* **TCS (Tax Collected at Source)** is *technically* collected on the amount **actually received** during the month, not just on the billed amount.
* So, you **can’t add TCS upfront in the original invoice** because you don’t know exactly how much the client will pay that month.
* The correct way, as per practice, is to issue a **separate debit note or TCS certificate** showing TCS on the amount received during that month.
* This way, you only charge TCS on actual collections, not on billed amount.
* Clients arguing for TCS to be added in the invoice itself is not fully aligned with how TCS works under law.
**Summary:**
* Original bill = without TCS
* TCS charged separately on collections → Debit Note or separate statement for TCS
This is also the common industry practice to avoid confusion.
If you want, I can help draft a sample debit note for TCS — would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Post Office RD Interest
- CG Tax On residential property
- Applicable TDS for Purchase of Flat from NRI
- Building and other construction workers welfare cess act 1996
- Eway bill for machinery reparing
- Bank Accounts in Balance Sheet for ITR 3
- ITR 3 FILING OF AN INDIVIDUAL (PARTNER IN A PARTNERSHIP fIRM)
- NRI ITR2 account in 2025-26 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.
- Form 10BD Filling
- Annual return of gst limit
- Gift of mutual fund units to daughter
- ESIC- Employee Registration
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
