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why tcs

BIBIN P B (Tax practitioner) (99 Points)

08 August 2018

can anyboby tell what the crux behind TCS

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CA Neelima Kotha (Consultant) (606 Points)
Replied 08 August 2018

Tax Collected at Source (TCS) is income tax collected in India payable by the seller who collects in turn from the buyer and it is provided under section 206C of Income Tax Act, 1961 at the sale of some goods which are specified. The TCS Rate is different for each category of goods

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BIBIN P B (Tax practitioner) (99 Points)
Replied 08 August 2018

thanks for your immediate reply
but i need know why TCS and wht the objective of collecting tcs

CA Ankith Jain (Chartered Accountant) (973 Points)
Replied 08 August 2018

The concept behind TCS is very simple, lets take a example of TCS on toll plaza is 2% i.e the the user have to 2% extra to the collector and who in turn pays to the govt. The concept behind this is that the govt cannot track you, so there would be a revenue loss for them, that’s why they allocated the responsibility to the toll collector, same reverse concept is in case of TDS i.e govt cant keep track on the receipient of money so they made responsible to the payer to deduct certain percentage.

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