Tax collected at source in 26AS

I did not travel abroad anywhere last year.  I believe TCS means that I have withheld tax from someone's payment and I need to pay it to the government. I am still clueless on what this might be...

Thanks in advance for any advice..

Originally posted by : Ramakumar M
	I did not travel abroad anywhere last year.  I believe TCS means that I have withheld tax from someone's payment and I need to pay it to the government. I am still clueless on what this might be...

No. TCS means someone else collected tax from you and deposited it with the taxwallahs in your name against your PAN.

Generally, TCS is over and above the payment / expense you intended to incur. Eg: If you sent Rs 10 lakh abroad, your "expense: is still 10 lakh. But in addition to that, the Bank will collect TCS from you and then deposit it with the tax department in your name against your PAN.

So even though more money went out of your pocket today, at the end of the year, your expense remains the same, because the additional TCS amount is the tax credit you have available to apply to your annual income tax payment.

TDS, on the other hand, is subtracted from the money you expected to receive. Your income remains the same, only the payment to you is split into two parts : one part you receive directly and the other part is paid to the tax department in your name against your PAN. TDS also is a tax credit that you have available to apply to your annual income tax payment.

In your case, if the ever-delightful ICICI Bank has not debited your account for this TCS amount appearing in your 26AS, it is most likely an error in their return filing and you can simply ignore it by not claiming it as a tax credit. But make sure to contact ICICI to ask them to correct their returns to avoid needless complications later.