TDS V/s TCS
This query is : Resolved
30 November 2009
Sir/Madam - Please differentiate between TDS and TCS in points with little elaboration.
30 November 2009
TDS is applicable at the time you are paying someone for your expenses. You have to deduct the TDS under the applicable section on the gross amount he bills you and pay him the balance. TDS is applicable upon credit or payment whichever earlier.
For certain businesses like liquor, scrap, toll plaza or parking area leasing etc. TCS is collected by the seller/lessor from the buyer/lessee. At the time of billing to buyer / lessee, the seller / lessor has to collect income tax at source on a certain percentage of the billed amount. It is applicable when the buyer / lessee pays or at the time it is billed by seller / lessor, whichever earlier. In this case once the amount is billed say on credit or deferred payment basis, even if the buyer / lessee does not pay the bill, the seller / lessor is liable to deposit the TCS amount with Government. He also has to issue certificate to the buyer / lessee and even if buyer / lessee has not paid the seller / lessor he can adjust the amount in his tax dues and claim a refund also.
For certain businesses like liquor, scrap, toll plaza or parking area leasing etc. TCS is collected by the seller/lessor from the buyer/lessee. At the time of billing to buyer / lessee, the seller / lessor has to collect income tax at source on a certain percentage of the billed amount. It is applicable when the buyer / lessee pays or at the time it is billed by seller / lessor, whichever earlier. In this case once the amount is billed say on credit or deferred payment basis, even if the buyer / lessee does not pay the bill, the seller / lessor is liable to deposit the TCS amount with Government. He also has to issue certificate to the buyer / lessee and even if buyer / lessee has not paid the seller / lessor he can adjust the amount in his tax dues and claim a refund also.
Dhirajlal Rambhia
(Expert)
09 August 2023
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