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Deduction of TDS / TCS

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basant

manager finance

46 Points Posted on 30 June 2021

We are service provider and required to deduct TCS u/s 206C(1H). Service Recipient is also saying to deduct TDS u/s 94C. Query as below;

1. Service Recipient has not informed us in advance about TDS deduction at their end !

2. Is it possible that both the parties can deduct TCS/TDS at their respective end on same (single) transaction.

Replies (3)

Quick Summary

This discussion clarifies the rules around Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for service providers. It explains that TCS under Section 206C(1H) applies to the sale of goods, not services. For services, TDS under Section 194C may be applicable. Crucially, both parties cannot deduct TDS/TCS on the same single transaction.

CMA Poornima Madhava

CMA

9106 Points Posted on 30 June 2021

1) 206C(1H) is applicable on the seller against sale of goods (not on services). For services, the service provider is required to deduct tax at source (in this case u/s 194C if applicable)

2) Both the parties are NOT required to deduct/collect tax on the same transaction.