The Income Tax Act of India has mechanisms for collecting taxes at the source. On extraordinary transactions, certain people are compelled to collect a particular proportion of tax from their buyers under these regulations. The majority of these activities are professional or commercial in nature. It has no impact on the average person.
TCS refers to the Tax collected at source (TCS) that a seller must pay and collect from the customer at the time of the sale. The items on which the seller is required to collect tax from the customers are governed by Section 206C of the Income Tax Act.
The taxes are not payable when the commodities listed below are used in the manufacture, processing, or production of goods. Tax must be paid if the same products are used for trade purposes.
|Types of Products||Rate|
|Timber wood from a forest that has been leased||2.50%|
|Minerals like lignite, coal and iron ore||1%|
|Liquor of an alcoholic character designed for human consumption||1%|
|Purchase of a vehicle costing more than Rs. 10 lakhs||1%|
|Any method other than forest leased timber wood||2.50%|
|Leaves of Tendu||5%|
|Apart from Tendu leaves and timber, a forest produces||2.50%|
|Bullion costing far beyond Rs. 2 lakhs/jewelry valued more than Rs. 5 lakhs||1%|
|Toll plaza, parking lot, and mining and quarrying||2%|
Some individuals or organisations have been designated as sellers for the purpose of collecting tax at the source.
Apart from the following list, no other supplier of goods can collect tax at source from buyers:
A buyer is a person who purchases items of a specific sort through a sale or the right to purchase such goods through auction, tender, or any other method. The buyers listed below, however, are free from paying tax at the point of sale.
A TCS certificate must be provided to the buyer of the goods when a tax collector files his quarterly TCS return, Form 27EQ. 2. The certificate issued for TCS returns filed is Form 27D. The following information can be seen on this certificate:
This certificate must be given within 15 days of the TCS quarterly returns being filed. The following are the deadlines:
|Quarter Ending||Date of generating Form 27D|
|For the quarter ending on 30th June||30th July|
|For the quarter ending on 30th September||30th October|
|For the quarter ending on 31st December||30th January|
|For the quarter ending on 31st March||30th May|
Situations that are exempt from tax collection at the source:
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